Our
MISSION
5402 S. 122nd East Avenue • Tulsa, Oklahoma 74146-2230
Educational
Development
Corporation
20I8
A N N U A L R E P O R T
NET REVENUES
EARNINGS PER SHARE
Usborne Books &
More
EDC Publishing
Basic
Diluted
Common Stock
Shares outstanding at year end
2018
2017
2016
2015
2014
4,089,806
4,090,074
4,064,610
4,024,539
3,977,943
Book value at year end
$ 4.99
$ 3.72
$
3.25
$ 3.06
$ 3.16
Market price range:
High Close
Low Close
$ 22.80
$ 14.60
$ 16.97
$ 5.80
$ 3.95
$ 6.75
$ 7.10
$
3.97
$ 3.57
$ 2.49
Market price at year end
$ 19.35
$ 9.55
$
11.34
$ 4.31
$ 3.75
DIRECTORS
CORPORATE DATA
John A. Clerico
Co-founder and Chairman
ChartMark Investments, Inc.
Ronald T. McDaniel
Retired Vice President - Sales
Educational Development Corporation
Notice of Annual Meeting
July 24, 2018, 10:00 a.m.
Educational Development Corporation
Executive Conference Room
5402 E.122nd East Avenue
Tulsa, Oklahoma 74146
Dr. Kara Gae Neal
Director, School of Urban Education
Form 10-K filed with the Securities and
The University of Tulsa
Exchange Commission is available upon
Form 10-K
Educational Development Corporation’s
Betsy Richert
Media Specialist
Tulsa Public Schools
Randall W. White
Chairman, President and
Chief Executive Officer
OFFICERS
Randall W. White
Chairman, President and
Chief Executive Officer
Dan O’Keefe
Chief Financial Officer
Heather Cobb
Vice President, UBAM
Craig M. White
Vice President - Information Systems
request. Write to:
Randall W. White, President
Educational Development Corporation
5402 E.122nd East Avenue
Tulsa, Oklahoma, 74146
Transfer Agent
American Stock Transfer and Trust Company
New York, New York
Auditors
HoganTaylor LLP
Tulsa, Oklahoma
Corporate Offices
5402 E.122nd East Avenue
Tulsa, Oklahoma, 74146-2230
Phone (918) 622-4522
Fax (918) 665-7919
www.edcpub.com
Letter From The President
Dear Shareholders,
ear Shareholders,
ear Shareholders,
ear Shareholders,
ear Shareholders,
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
What a difference a year makes! I was reading my letter from last year and realized it was primarily describing
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the adversities we faced growing the Company from $35 million in revenues to $106 million in two years. And then,
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
the letter ended with my expectations of increased margins in the upcoming periods and excitement and optimism
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
for fiscal year 2018. I am pleased to report those expectations were exceeded as we have just completed the most
successful year in our history.
successful year in our history.
successful year in our history.
successful year in our history.
successful year in our history.
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
Our first challenge was to avoid deterioration in revenue due to our operational problems. I am glad to report
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
that was achieved with a 5% growth in revenues over last year, with a double digit increase in order volumes in
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
the third and fourth quarters, after adjusting for out of period items (what our accounting team calls “Deferred
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
Revenues”). While the overall 5% revenue growth may seem small compared to our recent history, it smashed any
ideas of a decline.
ideas of a decline.
ideas of a decline.
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
Our prior two years were also plagued with operational issues from struggling to keep up with the
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
extraordinary growth, which resulted in disappointing margins. However, the technology and automation
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
enhancements, which began in fiscal year 2016 and continued through fiscal year 2018, were key elements to our
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
margin improvement this year. This was most exemplified by the shipment time improvements during our fall
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
selling season. During the fall of fiscal year 2017, customer orders were taking up to five weeks to ship and, by the
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
fall of fiscal year 2018, shipping times were back to our normal lead times of two days or less. And again, this was
on increased order volumes over the prior year.
on increased order volumes over the prior year.
on increased order volumes over the prior year.
on increased order volumes over the prior year.
on increased order volumes over the prior year.
on increased order volumes over the prior year.
on increased order volumes over the prior year.
on increased order volumes over the prior year.
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
Customer service issues have also dramatically improved with over 96% of our customer service “tickets” being
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
answered and resolved the same day. This improvement has allowed the department staff to be “rightsized” at 50%
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
of the previous staff levels, with several customer service representatives transitioning to other openings within
the Company.
the Company.
the Company.
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
While the massive increase in sales caused operational problems in fiscal 2016 and 2017, they also created the
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
opportunity for lower cost of goods due to our increased buying power, and we expect this benefit to continue into
future periods.
future periods.
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
Our balance sheet was also impacted by the operational and revenue challenges of the prior years with short
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
term borrowings on our line of credit reaching a high of over $9 million during the year. However, by the end of the
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
year, our line of credit was reduced back to historical nominal levels. Brining our vendors back to normal payment
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
terms and paying down our line of credit were great accomplishments this past year. These accomplishments also
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
recently resulted in improvements with our bank including covenants being removed, reduced borrowing rates and
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
allowing the resumption of dividends; the first of which is being paid on June 21, 2018.
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
The improvement in every aspect of our company resulted in an extraordinary year with revenue up 5% and
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
net earnings up by an amazing 82%. These improvements were also appreciated by the investment community as
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
Educational Development Corporation was recognized as the top performing publicly traded stock in Oklahoma,
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
as reported by The Daily Oklahoman, and the top performing publicly traded stock in the publishing industry as
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
reported in Publishers Weekly. In addition, we were recognized by Direct Selling News as one of the Global 100 top
direct selling companies.
direct selling companies.
direct selling companies.
direct selling companies.
direct selling companies.
direct selling companies.
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
I am very proud of the results for our fiscal 2018, our incredible employees, our loyal retail customers and our
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
direct sales force of Usborne Books & More. We have high expectations for fiscal 2019 as we leave the adversities
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
faced in 2016 and 2017 in our “rear view mirror”. Our challenge in fiscal year 2019 will be to restore historic growth
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
levels in revenue while continuing to improve margins; and we are very optimistic these will occur.
EDC is a great company to work for and a great company to own.
Cordially yours,
Cordially yours,
Randall W. White
Randall W. White
Randall W. White
Chairman of the Board, President
Chairman of the Board, President
Chairman of the Board, President
and Chief Executive Officer
and Chief Executive Officer
and Chief Executive Officer
and Chief Executive Officer
About EDC
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
Educational Development Corporation (EDC) is a publishing company specializing in books for children. EDC is the
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
American co-publisher of the UK-based Usborne Books and owns Kane Miller, which publishes children’s literature from
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
around the world. EDC’s current catalog contains over 2,200 titles, with new additions semi-annually. Both Usborne and Kane
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
Miller products are sold nationally by over 35,000 direct sales consultants, as well as in 4,000 book, toy and specialty stores.
EDC History
1965 EDC founded to develop supplemental curriculum material for schools
EDC founded to develop supplemental curriculum material for schools
EDC founded to develop supplemental curriculum material for schools
EDC founded to develop supplemental curriculum material for schools
EDC founded to develop supplemental curriculum material for schools
EDC founded to develop supplemental curriculum material for schools
EDC founded to develop supplemental curriculum material for schools
1978 EDC acquires the rights to publish Usborne books in North America
EDC acquires the rights to publish Usborne books in North America
EDC acquires the rights to publish Usborne books in North America
EDC acquires the rights to publish Usborne books in North America
EDC acquires the rights to publish Usborne books in North America
EDC acquires the rights to publish Usborne books in North America
EDC acquires the rights to publish Usborne books in North America
EDC acquires the rights to publish Usborne books in North America
EDC acquires the rights to publish Usborne books in North America
1983 EDC hires Randall W. White as Treasurer
EDC hires Randall W. White as Treasurer
1986 EDC announces Randall W. White as new President and Chief Executive Officer
EDC announces Randall W. White as new President and Chief Executive Officer
EDC announces Randall W. White as new President and Chief Executive Officer
EDC announces Randall W. White as new President and Chief Executive Officer
EDC announces Randall W. White as new President and Chief Executive Officer
EDC announces Randall W. White as new President and Chief Executive Officer
EDC announces Randall W. White as new President and Chief Executive Officer
EDC announces Randall W. White as new President and Chief Executive Officer
EDC announces Randall W. White as new President and Chief Executive Officer
EDC announces Randall W. White as new President and Chief Executive Officer
1989 EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
EDC launches the Direct Sales Division, focusing exclusively on Usborne books
1997 Direct Sales Division holds first annual convention in Tulsa
Direct Sales Division holds first annual convention in Tulsa
Direct Sales Division holds first annual convention in Tulsa
Direct Sales Division holds first annual convention in Tulsa
Direct Sales Division holds first annual convention in Tulsa
Direct Sales Division holds first annual convention in Tulsa
2008 EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
EDC acquires Kane Miller, renames the Direct Sales Division “Usborne Books & More” (UBAM)
2011 EDC hires Heather Cobb as UBAM National Sales Manager
EDC hires Heather Cobb as UBAM National Sales Manager
EDC hires Heather Cobb as UBAM National Sales Manager
EDC hires Heather Cobb as UBAM National Sales Manager
EDC hires Heather Cobb as UBAM National Sales Manager
2012 EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
EDC President & CEO Randall White makes the decision to stop selling through Amazon
2014 EDC promotes Heather Cobb to Vice President of UBAM
EDC promotes Heather Cobb to Vice President of UBAM
EDC promotes Heather Cobb to Vice President of UBAM
EDC promotes Heather Cobb to Vice President of UBAM
EDC promotes Heather Cobb to Vice President of UBAM
EDC promotes Heather Cobb to Vice President of UBAM
EDC promotes Heather Cobb to Vice President of UBAM
EDC promotes Heather Cobb to Vice President of UBAM
EDC promotes Heather Cobb to Vice President of UBAM
2015 EDC purchases Hilti complex in Tulsa
EDC purchases Hilti complex in Tulsa
EDC purchases Hilti complex in Tulsa
EDC purchases Hilti complex in Tulsa
EDC purchases Hilti complex in Tulsa
EDC purchases Hilti complex in Tulsa
2017 EDC surpasses $100 million in annual sales
EDC surpasses $100 million in annual sales
EDC surpasses $100 million in annual sales
EDC surpasses $100 million in annual sales
EDC surpasses $100 million in annual sales
EDC surpasses $100 million in annual sales
2018 EDC announced in Direct Selling News Global 100
EDC announced in Direct Selling News Global 100
EDC announced in Direct Selling News Global 100
EDC announced in Direct Selling News Global 100
EDC announced in Direct Selling News Global 100
EDC announced in Direct Selling News Global 100
Usborne Books
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
Usborne Publishing was created in 1973 and has become the leading UK independent publishing company focused
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
on early childhood learning. Founder Peter Usborne pioneered a new generation of vividly illustrated books created with the
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
belief that children are intelligent, learn more than adults on a daily basis, and deserve compelling books that are visually and
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
intellectually stimulating. This vision has been extended to incorporate over 2,000 titles for children of every age, from infants
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
to teenagers, in a variety of topics and formats. Usborne books are currently published globally in over 100 languages.
Kane Miller Books
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
For over 25 years, Kane Miller has been publishing award-winning children’s books in the United States from some
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
of the best author’s from around the world. Kane Miller books transport the reader to places that are simultaneously
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
different and familiar. Kane Miller titles foster global awareness, good citizenship, appreciation for diversity, kindness and
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
perseverance. Like Usborne, Kane Miller offers books in a variety of formats for every age, from babies to adults.
Heather Cobb
Vice President
UBAM
News from Our
Two Sales Divisions
Usborne Books & More
(UBAM) Division
of EDC’s net revenues. This has been a
Usborne Books & More is EDC’s Direct Sales Division, representing 93% of EDC’s net revenues. This has been a
of EDC’s net revenues. This has been a
of EDC’s net revenues. This has been a
of EDC’s net revenues. This has been a
of EDC’s net revenues. This has been a
of EDC’s net revenues. This has been a
Usborne Books & More is EDC’s Direct Sales Division, representing
Usborne Books & More is EDC’s Direct Sales Division, representing
Usborne Books & More is EDC’s Direct Sales Division, representing
Usborne Books & More is EDC’s Direct Sales Division, representing
Usborne Books & More is EDC’s Direct Sales Division, representing
Usborne Books & More is EDC’s Direct Sales Division, representing
Usborne Books & More is EDC’s Direct Sales Division, representing
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
record-breaking year, with net revenues up 6% from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
from fiscal year 2017, totaling $103,698,600 in fiscal year 2018.
record-breaking year, with net revenues up
record-breaking year, with net revenues up
record-breaking year, with net revenues up
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
As Usborne Books & More marches toward thirty years in the direct selling industry, there continue to be
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
accomplishments achieved each year - surpassing goals and receiving recognition in both the publishing and direct
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
sales markets. While the basic tenets of the direct sales business have not changed drastically throughout our years, the
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
approach has evolved with the upgrades in technology and the increased use of social media platforms as marketing
tools.
tools.
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
One of the highlighted achievements for this year was being recognized by the Direct Selling News as part of their
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
Global 100, which honors global companies based on revenue. Usborne Books & More was proud to be a part of this
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
distinguished list, especially as our sales can only be attributed to the United States, while many other honorees sell
internationally.
internationally.
internationally.
internationally.
internationally.
internationally.
internationally.
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
UBAM consultants continue to sell through multiple avenues, including parties both in homes and online, book
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
fairs, a grant matching program, fundraisers, reading incentive programs, and more. All of these sales opportunities roll
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
into the various promotions and incentives offered by Home Office, such as monthly challenges and a travel incentive
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
contests, such as our 2018 contest which is taking earners to Punta Cana, Dominican Republic this year.
FY2018 Key Performance Indicators:
• New Consultants: 32,400 32%
• New Consultants: 32,400 32%
• New Consultants: 32,400 32%
• New Consultants: 32,400 32%
• New Consultants: 32,400 32%
• Success Bound Consultants: 41% of all new recruits; 8%
• Success Bound Consultants: 41% of all new recruits; 8%
• Success Bound Consultants: 41% of all new recruits; 8%
• Success Bound Consultants: 41% of all new recruits; 8%
• Success Bound Consultants: 41% of all new recruits; 8%
• Success Bound Consultants: 41% of all new recruits; 8%
• Success Bound Consultants: 41% of all new recruits; 8%
• Success Bound Consultants: 41% of all new recruits; 8%
• Success Bound Consultants: 41% of all new recruits; 8%
• Success Bound Consultants: 41% of all new recruits; 8%
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
(These consultants experience a level of success in their first twelve weeks of business)
• New Team Leaders: 1,200 3%
• New Team Leaders: 1,200 3%
EDC Publishing (Retail) Division
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
The Publishing Division, also known as the Retail Division, sells to large national bookstore chains and independent
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
retailers, including book, toy and gift stores nationwide. Net revenues for this division were $8,267,500 in fiscal 2018,
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
a decrease of 8.2% from fiscal 2017. One reason for the decrease in net revenues came from a major retail customer
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
changing their marketing and physical merchandising strategy, limiting the visibility of our products in their stores. This
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
had negative impact on our product sales from this retail chain. Another large retail account switched to a different
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
distribution supplier, temporarily stopping our ability to supply the retail chain. Offsetting some of these declines, our
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
Preferred Dealer accounts, which markets out products through smaller independent retailers, increased their sales as a
group by 9.5% over the prior year.
group by 9.5% over the prior year.
group by 9.5% over the prior year.
group by 9.5% over the prior year.
group by 9.5% over the prior year.
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
The independent toy and gift sector also saw growth in fiscal 2018 as these stores continue to gain more popularity
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
in the market. We are focused on continuing our growth in this sector through continued advertising, mailings and
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
direct sales calls. To reach new customers, we also attend and exhibit at prominent national trade shows such as Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Fair, New York NOW, San Francisco Gift Show, Atlanta Gift Show, Las Vegas Gift Show, ASTRA (American Specialty Toy
Retailing Association) and the Museum Store Association Show.
Retailing Association) and the Museum Store Association Show.
Retailing Association) and the Museum Store Association Show.
Retailing Association) and the Museum Store Association Show.
Retailing Association) and the Museum Store Association Show.
Retailing Association) and the Museum Store Association Show.
Retailing Association) and the Museum Store Association Show.
Retailing Association) and the Museum Store Association Show.
Retailing Association) and the Museum Store Association Show.
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
The Publishing Division maintains a strong presence in the children’s book publishing industry and we remain
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
focused and committed to the return of top line revenue growth within this division in the upcoming year.
Dan O’Keefe
Chief Financial Officer
Craig M. White
Vice President
Information Technology
Stock Prices & Dividends Paid
STOCK PRICES AND DIVIDENDS PAID
Fiscal Year
Stock Prices
Cash Dividend Paid
2018
2018
2018
2017
2017
2016
2016
2016
2015
2014
2013
2013
2012
2012
2012
2011
2011
HighHighHigh
$$$ 22.80
22.80
22.80
14.60
$$ 14.60
$ 16.97
16.97
5.805.80
$$
3.953.95
$$
5.00
$$
6.90
$
7.007.00
$
LowLow
6.75
7.107.10
3.973.97
3.573.573.57
2.49
3.79
3.803.80
5.155.15
$
$$
$$
$$$
$$$
$
$
$$
-
0.360.360.36
0.340.34
0.32
0.320.32
0.440.44
0.480.48
0.54
$$$
$$$
$$
$
$$
$
$
Operations
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
We view our operational improvements as the key to much of our bottom line success in fiscal 2018. We completed
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
several capital expenditures (“cap-ex”) projects during the year that increased our daily shipping capacity and improved
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
our shipping accuracy. The first of these improvements was the redesign of our two largest pick lines. We added
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
14 “zones” within these lines which allowed a more structured picking process. We also constructed a divert system
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
within these two pick lines that automatically diverts orders only into zones that contain an item within that order.
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
By increasing the automation on these lines and implementing diverts to by-pass the non-pick zones on the order, we
were able to double the speed of these two pick lines.
were able to double the speed of these two pick lines.
were able to double the speed of these two pick lines.
were able to double the speed of these two pick lines.
were able to double the speed of these two pick lines.
were able to double the speed of these two pick lines.
were able to double the speed of these two pick lines.
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
Our second large cap-ex project was the redesign and added automation within our pack area. Our redesign
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
effectively combined our separate quality control, pack-out, physical packing, and shipping processes into individual
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
scanning stations, where all functions are performed by a single packer. We also installed automated conveyor lines in
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
the pack area to reduce unneeded movements. These changes reduced the packing time associated with each order as
well as increased our overall order accuracy.
well as increased our overall order accuracy.
well as increased our overall order accuracy.
well as increased our overall order accuracy.
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
When compared year-over-year, these operational changes increased our daily shipping capacity from
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
approximately 8,000 orders in two eight-hour shifts in fiscal 2017 to almost 8,000 order capacity in one eight-hour shift
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
in fiscal 2018. The packing changes also helped reduce our error rate from 7% to 2% during this same time. The pick
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
line and packing changes, along with several other operational improvements, all resulted in savings that we saw drop
to the bottom line in fiscal 2018.
to the bottom line in fiscal 2018.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
□ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 28, 2018
OR
For the transition period from
to
.
Commission file number: 000-04957
EDUCATIONAL DEVELOPMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
5402 South 122nd East Avenue, Tulsa, Oklahoma
(Address of principal executive offices)
73-0750007
(I.R.S. Employer
Identification No.)
74146
(Zip Code)
Securities registered pursuant to Section 12(b) of the Act:
Registrant’s telephone number, including area code (918) 622-4522
Common Stock, $.20 par value
(Title of class)
NASDAQ
(Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes □
Yes □
No ☒
No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒
No □
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ☒
No □
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. □
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company or an emerging growth company. See definitions of ‘‘large accelerated filer’’, ‘‘accelerated filer’’, ‘‘smaller reporting company’’
and ‘‘emerging growth company’’ in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer □
Non-accelerated filer □
(Do not check if a smaller reporting company)
Emerging growth company □
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
Accelerated filer □
Smaller reporting company ☒
Yes □
No ☒
The aggregate market value of the outstanding shares of common stock held by non-affiliates of the registrant at the price at which the
common stock was last sold on August 31, 2017 on the NASDAQ Stock Market, LLC was $32,691,300.
As of May 23, 2018, 4,088,383 shares of common stock were outstanding.
Portions of the Proxy Statement for fiscal year 2018 relating to our Annual Meeting of Shareholders to be held on July 24, 2018 are
incorporated by reference into Part III of this Report on Form 10-K.
DOCUMENTS INCORPORATED BY REFERENCE
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TABLE OF CONTENTS
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Item 16.
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . .
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . .
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors and Executive Officers of the Registrant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Principal Accountant’s Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1
3
3
3
3
3
4
4
5
15
15
15
15
16
17
17
17
17
17
18
20
[THIS PAGE INTENTIONALLY LEFT BLANK]
FORWARD-LOOKING STATEMENTS
PART I
CAUTIONARY REMARKS REGARDING FORWARD LOOKING STATEMENTS
The information discussed in this Annual Report on Form 10-K includes ‘‘forward-looking statements.’’
These forward-looking statements are identified by their use of terms and phrases such as ‘‘may,’’ ‘‘expect,’’
‘‘estimate,’’ ‘‘project,’’ ‘‘plan,’’ ‘‘believe,’’ ‘‘intend,’’ ‘‘achievable,’’ ‘‘anticipate,’’ ‘‘continue,’’ ‘‘potential,’’
‘‘should,’’ ‘‘could,’’ and similar terms and phrases. Although we believe that the expectations reflected in these
forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties and we
can give no assurance that such expectations or assumptions will be achieved. Known and unknown risks,
uncertainties and other factors may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by forward-looking
statements. Factors that could cause or contribute to such differences include, but are not limited to, our success
in recruiting and retaining new consultants, our ability to locate and procure desired books, our ability to ship the
volume of orders that are received without creating backlog, our ability to obtain adequate financing for working
capital and capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties,
as well as those factors discussed below and elsewhere in this Annual Report on Form 10-K, all of which are
difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed
may not occur. All forward-looking statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements in this paragraph and elsewhere in this Annual Report on
Form 10-K and speak only as of the date of this Annual Report on Form 10-K. Other than as required under the
securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new
information, subsequent events or circumstances, changes in expectations or otherwise. As used in this Annual
Report on Form 10-K, the terms ‘‘EDC,’’ ‘‘we,’’ ‘‘our’’ or ‘‘us’’ mean Educational Development Corporation, a
Delaware corporation, unless the context indicates otherwise.
Item 1. BUSINESS
(a) General Description of Business
We are the exclusive United States trade co-publisher of the line of educational children’s books produced in
the United Kingdom by Usborne Publishing Limited (‘‘Usborne’’) and we also exclusively publish books through
our ownership of Kane Miller Book Publisher (‘‘Kane Miller’’); both award-winning publishers of international
children’s books. We are a coporation incorporated on August 23, 1965, under the laws of the State of Delaware.
Our fiscal years end on February 28 (29).
Our Company motto is ‘‘The future of our world depends on the education of our children. EDC delivers
educational excellence one book at a time. We provide economic opportunity while fostering strong family
values. We touch the lives of children for a lifetime.’’
(b) Financial Information about Our Segments
While selling children’s books and related products (collectively referred to as ‘‘books’’) is our only line of
business, we sell them through two business segments, which we sometimes refer to as ‘‘divisions’’:
•
•
Home Business Division (‘‘Usborne Books & More’’ or ‘‘UBAM’’) – This division sells our books
through independent consultants directly to our customers. Our consultants sell books by hosting home
parties, through social media collaboration platforms on the internet, by hosting book fairs with school
and public libraries and through other events.
Publishing Division (‘‘EDC Publishing’’ or ‘‘Publishing’’) – This division sells our books to bookstores
(including major national chains), toy stores, specialty stores, museums and other retail outlets
throughout the country.
1
Percent Net Revenues by Division
UBAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Publishing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93%
7%
92%
8%
Total net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100% 100%
FY 2018 FY 2017
(c) Narrative Description of Business
Products
As the exclusive United States trade co-publisher of the Usborne books and sole publisher of Kane Miller
books, we offer over 2,000 different children’s books. Many of our books are interactive in nature, including our
Touchy-Feely board books, activity and flashcards, adventure and search books, art books, sticker books and
foreign language books. Most of our books are originally published in other countries, in their native languages,
and we translate them to common American English and have exclusive rights to publish the titles in
United States.
We have a broad line of ‘internet-linked’ books which allow readers to expand their educational experience
by referring them to relevant non-Company websites. Our books include science and math titles, as well as
chapter books and novels. We continually introduce new titles across all lines of our products.
UBAM markets the books through commissioned consultants using a combination of direct sales, home
parties, book fairs and internet based social media party plans. The division had approximately 35,500 active
consultants in 50 states at February 28, 2018.
Our Publishing division markets through commissioned trade representatives who call on retail book, toy,
and specialty stores along with other retail outlets. Publishing also conducts in-house marketing by telephone to
these customers and potential customers. This division markets to approximately 4,000 book, toy and specialty
stores. Approximately 8% of our Publishing division’s net sales, are to major book chains.
Key Customers
No customer represents more than 10% of our net sales.
Seasonality
Sales for both divisions are greatest during the fall due to the holiday season.
Competition
While we have the exclusive U.S. rights to sell Usborne Books and our Kane Miller published books, we
face competition from the internet and other book publishers who are also selling directly to our customers. Our
UBAM division competes in recruiting and retaining sales consultants, which continuously receive opportunities
to work for larger direct selling companies. We also compete with Scholastic Books in the school and library
book fair market.
Our Publishing division faces competition from large U.S. and international publishing companies.
Employees
As of May 16, 2018, 193 full-time employees worked at our Tulsa office and distribution facility and at our
San Diego office. Of these employees, approximately 65% of our employees work in our distribution warehouse.
We believe our relations with our employees are good.
Company Reports
We make available, free of charge, on our website (www.edcpub.com) copies of our Annual Reports,
Quarterly Reports, Current Reports on Form 8-K, amendments to those reports filed or furnished to the Securities
and Exchange Commission (‘‘SEC’’) pursuant to Section 13(a) or 15(d) of the Exchange Act and reports of
holdings of our securities filed by our officers and directors under Section 16 of the Exchange Act as soon as
reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC.
2
Item 1A. RISK FACTORS
We are a smaller reporting company and are not required to provide this information.
Item 1B. UNRESOLVED STAFF COMMENTS
None
Item 2. PROPERTIES
Our headquarters office and distribution warehouse are located on a 40 acre complex at 5402 S 122nd East
Ave, Tulsa, Oklahoma. We own the complex which includes multiple buildings that combine to approximately
400,000 square feet of office and warehouse space, of which 218,700 is utilized by us and 181,300 is occupied
by a third-party tenant. All product distributions are made from our 170,000 square foot warehouse using
multiple flow-rack systems, known as ‘‘the lines,’’ to expedite order fulfillment, packaging, and shipment.
We also own a facility located at 10302 E. 55th Pl., Tulsa, Oklahoma that contains approximately
95,000 square feet of warehouse space which is used to store our overflow inventory, along with approximately
10,000 square feet of office space that is currently vacant. In addition to these owned properties, we also lease a
small office in San Diego, California that is used to by our Kane Miller employees. We believe that our
operating facilities meet both present and future capacity needs.
Item 3. LEGAL PROCEEDINGS
We are not a party to any material pending legal proceedings.
Item 4. MINE SAFETY DISCLOSURES
None
3
PART II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The common stock of EDC is traded on NASDAQ (symbol ‘‘EDUC’’). The high and low quarterly common
stock quotations for fiscal years 2018 and 2017, as reported by the NASDAQ, were as follows:
Period
1st quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4th quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
High
9.85
11.45
14.45
22.80
Low
6.75
9.50
9.50
13.75
High
14.60
13.87
12.75
10.50
Low
10.65
9.95
8.50
7.10
FY 2018
FY 2017
The number of shareholders of record of EDC’s common stock as of May 23, 2018 was 537.
During fiscal year 2017, we paid quarterly dividends totaling $0.36 per share as follows: $0.09 per share
dividend on March 18, 2016, $0.09 per share dividend on June 17, 2016, $0.09 per share dividend on
September 23, 2016, and $0.09 per share dividend on December 16, 2016. On February 16, 2017, we announced
that we were suspending dividends to focus all resources and cash requirements toward financing future growth.
Subsequent to year end, the Board of Directors of the Company approved the reinstatement of dividends, further
disclosed in the footnotes to the financial statements.
ISSUER PURCHASES OF EQUITY SECURITIES
Period
Total # of
Shares
Purchased
Average Price
Paid Per
Shares
December 1 - 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 1-31, 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 1-28, 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
28
28
$ —
$ —
$21.43
$21.43
Total # of
Shares
Purchased as
Part of
Publicly
Announced
Plan(1)
—
—
—
—
Maximum # of
Shares that
may be
Repurchased
under the Plan
296,632
296,632
296,604
296,604
(1)
In April 2008, the Board of Directors authorized us to purchase up to 500,000 additional shares of our common stock under a plan
initiated in 1998. This plan has no expiration date.
We announced no repurchases of our common stock during our fiscal year 2018. Throughout the year we
made several small purchases of shares from employees electing to withdraw from our 401(k) plan. The ability
to repurchase shares was also subject to certain restrictions outlined in the fourth amendment to our Loan
Agreement with our primary lender.
Item 6. SELECTED FINANCIAL DATA
We are a smaller reporting company and are not required to provide this information.
4
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a
discussion of our business, including a general overview of our segments, our results of operations, our liquidity
and capital resources, and our quantitative and qualitative disclosures about market risk.
The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs
and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties
that may be outside our control. Our actual results could differ materially from those discussed in these
forward-looking statements. See ‘‘Cautionary Remarks Regarding Forward-Looking Statements’’ in the front of
this Annual Report on Form 10-K.
Management Summary
We are the exclusive United States trade co-publisher of Usborne children’s books and the owner of Kane
Miller. We operate two separate segments: UBAM and Publishing, to sell our Usborne and Kane Miller
children’s books. These two segments each have their own customer base. The Publishing segment markets its
products on a wholesale basis to various retail accounts. The UBAM segment markets its products through a
network of independent sales consultants using a combination of home shows, internet party plan events and
book fairs. All other supporting administrative activities are recognized as other expenses outside of our two
segments. Other expenses are primarily compensation of our office, warehouse and sales support staff as well as
the cost of operating and maintaining our corporate office and distribution facility.
UBAM Division
Our UBAM division uses a multi-level direct selling platform to market books through independent sales
representatives (‘‘consultants’’) located throughout the United States. The customer base of UBAM consists of
individual purchasers, as well as schools and public libraries. Revenues are primarily generated through book
showings in individual homes, social media collaboration platforms, book fairs with school and public libraries
and other events. This past fiscal year continued a significant shift toward internet sales via social media
platforms, such as Facebook.
An important factor in the continued growth of the UBAM division is the addition of new sales consultants
and the retention of existing consultants. Current active consultants (defined as those with sales during the past
six months) often recruit new sales consultants. UBAM makes it easy to recruit by providing signing kits for
which new consultants can earn partial or full reimbursement based on established sales criteria. In addition, our
UBAM division provides our consultants with an extensive handbook, valuable training and an individual
website that they can customize and use to operate their business.
Consultants
New Consultants During Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Active Consultants End of Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,400
35,500
24,600
25,800
Our UBAM division’s multi-level marketing platform presently has six levels of sales representatives:
FY 2018
FY 2017
•
•
•
•
•
•
Consultants
Team Leaders
Senior Team Leaders
Executive Team Leaders
Senior Executive Team Leaders
Directors
Upon signing up, sales representatives begin as consultants. Consultants receive commissions from each sale
they make; the commission rate they receive on each sale is determined by the marketing program under which
5
the sale is made. In addition, consultants receive a monthly sales bonus once their sales reach an established
monthly goal. Consultants who recruit other consultants and meet certain established criteria are eligible to
become team leaders. Upon reaching this level, they receive monthly override payments based upon the sales of
their downline groups.
Once team leaders reach certain established criteria, they become senior team leaders and are eligible to
earn promotion bonuses on their downline groups. Once senior team leaders reach certain established criteria,
they become executive team leaders, senior executive team leaders or directors. Executive team leaders and
higher receive an additional monthly override payment based upon the sales of their downline groups.
During fiscal year 2018, we continued to have strong growth in our internet sales within our UBAM
division. With the increased use of social media, party plan platforms, such as those available on Facebook, have
become popular sales tools. These platforms allow consultants to ‘‘present’’ and customers to ‘‘attend’’ online
purchasing events from any location.
Customer’s internet orders are primarily received via the consultant’s customized website, which is hosted
by the Company. Internet orders are processed through a shopping cart and the consultant receives sales credit
and commission on the sales. Much of the increase in sales has resulted from the use of social media party plan
platforms to host virtual parties, frequently referred to as ‘‘Facebook Parties,’’ and from the increase in the
number of sales consultants. All internet orders are shipped directly to the end customer. The increase in internet
orders has resulted in a decrease in order size.
Home parties occur when consultants contact hosts or hostesses (collectively ‘‘hostess’’) to hold book shows
in their homes. The consultant assists the hostess in setting up the details for the show, makes a presentation at
the show and takes orders for the books. The hostess earns discounted books based on the total sales at the party,
including online internet orders for those customers that can only attend via online access. Home party orders are
typically shipped to the hostess who then distributes the books to the end customer. Customer specials are also
available for customers when they or their party order above a specified amount. Additionally, home shows often
provide an excellent opportunity for recruiting new consultants.
The school and library program includes book fairs which are held with an organization as the sponsor. The
consultant provides promotional materials to introduce our books to parents. Parents turn in their orders at a
designated time. The book fair program generates free books for the sponsoring organization. UBAM also has a
Reach for the Stars fundraiser program. This pledge-based reading incentive program provides cash and books to
the sponsoring organization and books for the participating children.
An additional fundraising program, Cards for a Cause, offers our consultants the opportunity to help
members of the community by sharing proceeds from the sale of specific items. Organizations sell variety boxes
of greeting-type cards and donate a portion of the proceeds to help support their related causes.
Publishing Division
Our Publishing division operates in a market that is highly competitive, with a large number of companies
engaged in the selling of books. The Publishing division’s customer base includes national book chains, regional
and local bookstores, toy and gift stores, school supply stores and museums. To reach these markets, the
Publishing division utilizes a combination of commissioned sales representatives located throughout the country
and a commissioned inside sales group located in our headquarters.
The table below shows the percentage of net revenues from our Publishing division based on market type.
Publishing Division Net Revenues by Market Type
National chain stores. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8%
92%
17%
83%
Total net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
100%
FY 2018
FY 2017
Publishing uses a variety of methods to attract potential new customers and maintain current customers. Our
employees attend many of the national trade shows held by the book selling industry each year, allowing us to
6
make contact with potential buyers who may be unfamiliar with our books. We actively target the national chains
through joint promotional efforts and institutional advertising in trade publications. Our Publishing division also
participates with certain customers in a cooperative advertising allowance program, under which we pay back up
to 2% of the net sales to that customer. Our products are then featured in promotions, such as catalogs, offered
by the vendor. We may also acquire, for a fee, an end cap position (our products are placed on the end of a
shelf) in a bookstore, which we and the publishing industry consider an advantageous location in the bookstore.
Publishing’s in-house sales group targets the smaller independent book and gift store market. Our
semi-annual, full-color, 170-page catalogs, are mailed to over 4,000 customers and potential customers. We also
offer two display racks to assist stores in displaying our products.
(1) Result of Operations
The following table shows our condensed statements of earnings data:
For the Twelve Months Ended
February 28,
2018
2017
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$111,966,100
30,931,300
$106,628,100
28,613,500
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81,034,800
78,014,600
Operating expenses:
Operating and selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,571,200
35,359,000
15,736,300
—
73,666,500
23,070,000
33,995,500
15,920,600
1,082,300
74,068,400
Other (income) expense
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,119,500
(1,583,900)
7,832,700
1,028,800
(1,694,700)
4,612,100
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,618,000
1,751,200
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 5,214,700
$
2,860,900
See the detailed discussion of revenues, costs of goods sold, gross margin, general and administrative
expenses by reportable segment below. The following is a discussion of significant changes in the non-segment
related general and administrative expenses, other income and expenses and income taxes during the respective
periods.
Non-Segment Operating Results for the Twelve Months Ended February 28, 2018
Operating expenses not associated with a reporting segment were $13.9 million for fiscal year ended
February 28, 2018 compared to $14.0 million for the same period a year ago. Operating expenses decreased
$0.4 million as a result of savings in warehouse labor associated with our increased daily shipping capacity. We
installed new automation equipment and made software enhancements during the fiscal year which more than
doubled our previous daily shipping capacity. These savings were partially offset by an increase in our short-term
incentive accrual associated with the Company’s increased operating profits of approximately $0.3 million,
among other reduced costs.
Interest expense totaled $1.1 million for the twelve months ended February 28, 2018, an increase of
$0.1 million over the $1.0 million of interest expense reported for the same period a year ago. Interest expense
increased during the current fiscal year due primarily to increased borrowings on the line of credit during the
current year.
7
Income taxes increased $0.8 million to $2.6 million for the twelve months ended February 28, 2018, from
$1.8 million for the same period a year ago. This increase was primarily related to our increase in pre-tax
earnings between the years. Our effective tax rate, including federal, state and franchise taxes, was 33.4% for
fiscal 2018 and 38.0% for fiscal 2017. The decrease in the tax rate from fiscal 2017 to fiscal 2018 resulted from
our reduced federal tax rate included with the passage of the Tax Cuts and Jobs Act of 2017 (‘‘Tax Act’’), which
is disclosed further in the footnotes to our financial statements.
UBAM Operating Results
The following table summarizes the operating results of the UBAM segment for the twelve months ended
February 28:
For the Twelve Months Ended
February 28,
2018
2017
Gross sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less discounts and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$108,170,800
(15,482,500)
11,010,300
$105,574,500
(19,088,100)
11,134,200
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
103,698,600
97,620,600
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,239,800
77,458,800
23,744,000
73,876,600
Operating expenses
Operating and selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,385,000
35,043,200
3,602,000
—
58,030,200
19,784,600
33,687,200
3,946,500
1,082,300
58,500,600
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 19,428,600
$ 15,376,000
Average number of active consultants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,900
24,900
Net revenues increased $6.1 million, or 6.3%, to $103.7 million for the fiscal year ended February 28, 2018,
when compared with net revenues of $97.6 million reported for fiscal year ending February 28, 2017. The
increase in UBAM net revenues is primarily attributed to the 24.6% increase in the average number of active
consultants during fiscal year 2018, over the same period a year ago. The increase in consultants resulted in
increased internet sales, home shows, book fairs and fundraiser events that all contributed to the growth in
UBAM. UBAM also includes sales to schools and libraries through educational consultants. Our sales to schools
and libraries were consistent with the prior year as we chose to limit accepting new educational consultants for
most of the fiscal year. In the fourth quarter of fiscal 2018, we launched a new School and Library Certification
Program (‘‘ESL Program’’) that requires our consultants to meet certain eligibility requirements including
attending web based training and certification along with an annual background check. This new program was
developed to address the safety concerns associated with our consultants entering schools, as well as, to increase
the quality and consistency of their presentations to schools and libraries. We expect this new program to have
positive results in upcoming years.
Gross margin increased $3.6 million to $77.5 million for the fiscal year ended February 28, 2018, from
$73.9 million reported for fiscal year ending February 28, 2017. The increase in gross margin primarily resulted
from the increase in sales. Gross margin as a percentage of net revenues, decreased to 74.7% for the fiscal year
2018, compared to 75.7% reported the same period a year ago. Our gross margin was higher in fiscal 2017 due
primarily to an annual volume discount that we received from one of our suppliers that was not repeated in fiscal
2018.
8
Total UBAM operating expenses decreased $0.5 million, or 0.1%, to $58.0 million during the fiscal year
ending February 28, 2018, when compared with $58.5 million reported for fiscal year ending February 28, 2017.
Operating expenses decreased primarily as a result of an impairment charge that was taken in fiscal 2017 to write
off a system implementation that was abandoned. This expense was not repeated in fiscal 2018.
Operating income of our UBAM division increased $4.0 million, or 26.4%, to $19.4 million during the
fiscal year ending February 28, 2018 when compared to $15.4 million reported for fiscal year ending
February 28, 2017. The increase in operating income was primarily due to increased sales.
Publishing Operating Results
The following table summarizes the operating results of the Publishing segment for the twelve months
ended February 28:
For the Twelve Months Ended
February 28,
2018
2017
Gross sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less discounts and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$17,676,400
(9,446,300)
37,400
$ 19,384,400
(10,398,200)
21,300
Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,267,500
9,007,500
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,691,500
3,576,000
4,869,500
4,138,000
Total operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,812,800
1,571,600
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,763,200
$ 2,566,400
Our Publishing division’s net revenues decreased $0.7 million, or 8.2%, to $8.3 million for the fiscal year
ended February 28, 2018, when compared with net revenues of $9.0 million reported for fiscal year ended
February 28, 2017. This decrease resulted from reduced sales to two of our large retail customers totaling
$0.8 million. One retail customer changed their marketing strategy to focus on more toys in the stores, which
limited the visibility of our products in their stores and had a negative impact on our product sales. Another large
retail book chain switched their book distribution supplier, at the end of our fiscal third quarter, which eliminated
our ability to supply the retail chain with our products.
Sales in our Publishing segment are seasonal and our fiscal fourth and first quarters are traditionally lower
than the second and third fiscal quarter’s sales.
Gross margin decreased $0.5 million to $3.6 million for the fiscal year ended February 28, 2018, from
$4.1 million reported for fiscal year ended February 28, 2017. The decrease in gross margin primarily resulted
from the decrease in sales to two of our large retail customers. Gross margin as a percentage of net revenues,
decreased to 43.3% for the fiscal year 2018, compared to 45.9% reported the same period a year ago. Our gross
margin was higher in fiscal 2017 due primarily to additional discounts that we received from one of our
suppliers.
Operating income for the segment declined $0.8 million, to $1.8 million, for fiscal year ended February 28,
2018 from $2.6 million reported during the same period last year. The decline in operating income resulted
primarily from the decline in sales and gross margin.
(2-3) Liquidity and Capital Resources
EDC has a history of profitability and positive cash flow. We typically fund our operations from the cash we
generate. We also use available cash primarily to pay down our outstanding bank loan balances, for capital
expenditures, to pay dividends, and to acquire treasury stock. During fiscal year 2018, we reduced our purchases
9
which decreased our inventory balances. The cash flow from reduced inventory was used to pay down our
vendors as well as pay off the balance in our revolving bank credit facility along with paying off other
borrowings. At fiscal year-end 2018, our revolving bank credit facility loan balance was $0 with $9,424,000 in
available capacity.
During fiscal year 2018, we generated positive cash flows from our operations of $9,232,700. Cash flows
resulted from the following:
•
•
•
•
•
•
•
•
net earnings of $5,214,700
depreciation expense of $1,251,000
a decrease in inventories of $7,079,000
the provision for doubtful accounts and sales returns of $510,900
the provision for inventory valuation allowance of $311,800
deferred income tax expense of $264,900
an increase in deferred revenues of $59,900
an increase in income tax payable of $279,400
Offset by:
•
•
•
a decrease in accounts payable, accrued salaries and commissions and other liabilities of $4,918,900
an increase in accounts receivable of $407,700
an increase in prepaid expenses and other assets of $412,300
The significant decrease in accounts payable, accrued salaries and commissions, and other current liabilities
was primarily a result of the payments made to our suppliers for inventory stock purchased in fiscal 2017 that
was sold during fiscal 2018.
Cash used in investing activities was $1,437,700 for capital expenditures. Our capital expenditures were
primarily associated with new automation equipment and enhancements made to our existing software products
to increase our daily shipping capacity.
Our capital expenditures included:
• Warehouse equipment of $1,105,200
• Warehouse management software system of $62,600
•
Other improvements to new facility and other equipment additions of $269,900
Cash used in financing activities was $5,770,900, which was primarily from the net payments on our
revolving credit agreement totaling $4,882,900 and payments on our long-term debt of $1,877,000. We also
received $1,019,000 from the proceeds from our long-term debt, $26,300 from the issuance of stock options and
$42,100 from the sale of treasury stock associated with employee purchases through payroll withholdings and
employer matching contributions to their 401(k) accounts, offset by $98,400 paid to acquire treasury stock.
We continue to expect our cash from operations and our expanded line of credit with our Bank will provide
us the ability to meet our liquidity requirements. Cash generated from operations will be used to increase
inventory in anticipation of continued sales growth, to liquidate existing debt, and any excess cash is expected to
be distributed to our shareholders.
We have a Loan Agreement with MidFirst Bank (‘‘the Bank’’) including Term Loan #1 comprised of
Tranche A of $13.4 million and Tranche B of $5.0 million both with the maturity date of December 1, 2025.
Tranche A has a fixed interest rate of 4.23% and interest is payable monthly. The Loan Agreement also includes
Term Loan #2 in the amount of $4.0 million, which is secured by a warehouse and land with the maturity date
of June 28, 2021, and a $15.0 million revolving loan (‘‘line of credit’’) through June 15, 2018.
Effective March 10, 2016, we signed a First Amendment Loan Agreement with the Bank which provided an
increase to $6.0 million from our original $4.0 million line of credit through June 15, 2016. Effective June 15,
10
2016, we signed a Second Amendment Loan Agreement with the Bank which provided a further increase to
$7.0 million from our previous $6.0 million line of credit and extended it through June 15, 2017. Effective
June 28, 2016, we signed a Third Amendment Loan Agreement with the Bank which included Term Loan #2 in
the amount of $4.0 million. Effective February 7, 2017, we signed a Fourth Amendment Loan Agreement with
the Bank which modified certain debt covenant calculations and waived an existing default that occurred in the
fourth quarter of fiscal year 2017.
Effective, June 15, 2017, the Company executed the Fifth Amendment Loan Agreement with the Bank
which modified the Loan Agreement to increase the maximum revolving principal amount from $7.0 million to
$10.0 million and extended the termination date of the Loan Agreement to June 15, 2018. The Fifth Amendment
also modified the Loan Agreement to include an Advancing Term Loan of $3.0 million which the Company used
to cover the cost of the fiscal 2018 capital improvements to increase our daily shipping capacity. The Advancing
Term loan accrued interest between June 15 and December 1, 2017, at which time the balance was converted to
a term loan and set to amortize over a thirty-six-month period.
Effective September 1, 2017, we signed a Sixth Amendment Loan Agreement with the Bank which further
increased the maximum revolving principal amount from $10.0 million to $15.0 million, subject to certain
collateral restrictions.
Effective February 15, 2018, we signed a Seventh Amendment Loan Agreement with the Bank which
modified the limitation on dividends as well as modified and removed other financial covenant calculations.
We had no borrowings outstanding on our revolving credit agreement at February 28, 2018 and $4.9 million
in borrowings at February 28, 2017. Available credit under the revolving credit agreement was $9,424,000 at
February 28, 2018.
Tranche B of Term Loan #1, Term Loan #2 and the line of credit accrue interest monthly, at the bank
adjusted LIBOR Index plus a tiered pricing rate based on the Company’s Adjusted Funded Debt to EBITDA
Ratio (4.7% at February 28, 2018).
The Loan Agreement also contains a provision for our use of the Bank’s letters of credit. The Bank agrees
to issue, or obtain issuance of commercial or stand-by letters of credit provided that the sum of the line of credit
plus the letters of credit issued would not exceed the borrowing base in effect at the time. For the year ended
February 28, 2018, we had no letters of credit outstanding. The agreement contains provisions that require us to
maintain specified financial ratios, restrict transactions with related parties, prohibit mergers or consolidation,
disallow additional debt, and limit the amounts of dividends declared, compensation, salaries, investments, capital
expenditures, and leasing transactions.
The following table reflects aggregate future maturities of long-term debt during the next five fiscal years
and thereafter as follows:
Year Ending February 28 (29)
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
881,200
920,400
959,000
1,003,900
1,048,600
15,893,200
Total Maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$20,706,300
In September 2002, the Board of Directors authorized a minimum annual cash dividend of 20% of net
earnings. In fiscal year 2017, we declared dividends equal 38%, of net income after taxes. On February 16, 2017,
we announced that we were suspending dividends to focus all resources and cash requirements toward financing
future growth. Subsequent to year end, the Board of Directors of the Company approved the reinstatement of
dividends, further disclosed in the footnotes to the financial statements.
In April 2008, our Board of Directors adopted a stock repurchase plan in which we may purchase up to an
additional 500,000 shares as market conditions warrant. When management expects the stock is undervalued and
11
when stock becomes available at an attractive price, we can utilize free cash flow to repurchase shares.
Management believes this enhances the value to the remaining shareholders and that these repurchases will have
no adverse effect on our short-term and long-term liquidity.
Contractual Obligations
We are a smaller reporting company and are not required to provide this information.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our
financial statements, which have been prepared in accordance with accounting principles generally accepted in
the United States. The preparation of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent
assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to our valuation
of inventory, allowance for uncollectible accounts receivable, allowance for sales returns, long-lived assets and
deferred income taxes. We base our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may materially differ from these estimates under different assumptions or conditions.
Historically, however, actual results have not differed materially from those determined using required estimates.
Our significant accounting policies are described in the notes accompanying the financial statements included
elsewhere in this report. However, we consider the following accounting policies to be more significantly
dependent on the use of estimates and assumptions.
Stock-Based Compensation
We account for stock-based compensation whereby share-based payment transactions with employees, such
as stock options and restricted stock, are measured at estimated fair value at date of grant and recognized as
compensation expense.
Revenue Recognition
Sales are generally recognized and recorded when products are shipped. Products are shipped FOB shipping
point. UBAM’s sales are generally paid at the time the product is ordered. Sales which have been paid for but
not shipped are classified as deferred revenue on the balance sheet. Sales associated with consignment inventory
are recognized when reported and payment associated with the sale has been remitted. Transportation revenue
represents the amount billed to the customer for shipping the product and is recorded when the product is
shipped.
Estimated allowances for sales returns are recorded as sales are recognized. Management uses a moving
average calculation to estimate the allowance for sales returns. We are not responsible for product damaged in
transit. Damaged returns are primarily received from the retail stores of our Publishing Division. Those damages
occur in the stores, not in shipping to the stores, and we typically do not offer credit for damaged returns. It is
industry practice to accept non-damaged returns from retail customers. Management has estimated and included a
reserve for sales returns of $100,000 and $190,000 for the fiscal years ended February 28, 2018 and 2017,
respectively.
Allowance for Doubtful Accounts, Sales Returns and Consignment Inventory Reserve for Inactive
Consultants
We maintain an allowance for estimated losses resulting from the inability of our customers to make
required payments. In addition, we maintain a reserve for estimated returns, as well as a reserve for consignment
inventory balances with inactive consultants that are not expected to be collected (collectively ‘‘allowance for
doubtful accounts and sales returns’’). An estimate of uncollectible amounts is made by management based upon
historical bad debts, current customer receivable balances, age of customer receivable balances, customers’
financial conditions and current economic trends. Consignment inventory related to inactive consultants is
reclassified to accounts receivable and the associated reserve is included within our allowance. If the actual
12
uncollected amounts significantly exceed the estimated allowance, then our operating results would be
significantly adversely affected. Management has estimated an allowance for doubtful accounts of $675,600 and
$675,000 as of February 28, 2018 and 2017, respectively. Included within this allowance is $100,000 and
$190,000 of reserve for sales returns and $278,500 and $217,000 of reserve related to consignment inventory
held by inactive consultants as of February 28, 2018 and 2017, respectively.
Inventory
Our inventory contains over 2,000 titles, each with different rates of sale, depending upon the nature and
popularity of the title. Almost all of our product line is saleable as the books are not topical in nature and remain
current in content today as well as in the future. Most of our products are printed in Europe, China, Singapore,
India, Malaysia and Dubai resulting in a four to six-month lead-time to have a title printed and delivered to us.
Certain inventory is maintained in a noncurrent classification. Management continually estimates and
calculates the amount of noncurrent inventory. Noncurrent inventory arises due to occasional purchases of titles
in quantities in excess of what will be sold within the normal operating cycle, due to minimum order
requirements of our suppliers. Noncurrent inventory was estimated by management using the current year
turnover ratio by title. All inventory in excess of 2 ½ years of anticipated sales is classified as noncurrent
inventory. Noncurrent inventory balances prior to valuation allowances were $707,700 and $467,100 at
February 28, 2018 and 2017, respectively.
Consultants that meet certain eligibility requirements are allowed to receive inventory on consignment. We
believe allowing our consultants to have consignment inventory greatly increases their ability to be successful in
making effective presentations at home shows, book fairs and other events; and having consignment inventory
leads to additional sales opportunities. Approximately 10% of our active consultants maintained consignment
inventory at the end of the fiscal year. Consignment inventory is stated at cost, less an estimated reserve for
consignment inventory that is not expected to be sold or returned to the Company. The total value of inventory
on consignment with active consultants was $1,270,700 and $1,140,700 at February 28, 2018 and 2017,
respectively. Inventory related to inactive consultants is reclassified to accounts receivables and amounted to
$278,500 and $309,000 at the end of fiscal year 2018 and 2017, respectively.
Inventories are presented net of a valuation allowance, which includes reserves for inventory obsolescence
and active consultant consignment inventory that is not expected to be sold or returned. Management estimates
the allowance for both current and noncurrent inventory. The allowance is based on management’s identification
of slow moving inventory and estimated consignment inventory that will not be sold or returned. Management
has estimated a valuation allowance for both current and noncurrent inventory of $453,300 and $300,000 as of
February 28, 2018 and 2017, respectively.
Our principal supplier, based in England, generally requires a minimum re-order of 6,500 or more of a title
in order to get a solo print run. Smaller orders would require a shared print run with the supplier’s other
customers, which can result in lengthy delays to receive the ordered title. Anticipating customer preferences and
purchasing habits requires historical analysis of similar titles in the same series. We then place the initial order or
re-order based upon this analysis.
These factors and historical analysis have led our management to determine that 2 ½ years represents a
reasonable estimate of the normal operating cycle for our products.
New Accounting Pronouncements
The Financial Accounting Standards Board (‘‘FASB’’) periodically issues new accounting standards in a
continuing effort to improve standards of financial accounting and reporting. We have reviewed the recently
issued pronouncements and concluded that the following recently issued accounting standards apply to us.
In May 2014, FASB issued ASU No. 2014-09, and amended with ASU No. 2015-14 ‘‘Revenue from
Contracts with Customers,’’ which provides a single revenue recognition model which is intended to improve
comparability over a range of industries, companies and geographical boundaries and will also result in enhanced
disclosures. The changes are effective for fiscal years, and interim periods within those years, beginning after
December 15, 2017, which means the first quarter of our fiscal year 2019. We do not expect the adoption of this
ASU will have a significant impact on the Company’s financial position, results of operations and cash flows.
13
In July 2015, FASB issued ASU No. 2015-11 ‘‘Inventory - Simplifying the Measurement of Inventory’’,
which is intended to allow measurement of inventory at the lower of cost and net realizable value. Net realizable
value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of
completion, disposal, and transportation. This ASU became effective for the Company on March 1, 2017. The
adoption of this ASU did not have a material impact on the Company’s financial position, results of operations
and cash flows.
In November 2015, FASB issued ASU No. 2015-17, ‘‘Income Taxes - Balance Sheet Classification of
Deferred Taxes,’’ which is intended to improve how deferred taxes are classified on organizations’ balance sheets
by eliminating the current requirement for organizations to present deferred tax liabilities and assets as current
and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred
tax assets and liabilities as noncurrent. The changes are effective for financial statements issued for annual
periods beginning after December 15, 2016, and interim periods within those annual periods, which means the
first quarter of our fiscal year 2018. We have retrospectively implemented this new presentation in our financial
statements. As of February 28, 2017, we reclassified $466,600 of current deferred tax assets to noncurrent assets
and netted $338,600 of deferred tax liabilities against the balance on the balance sheet. The adoption of this ASU
did not affect our statements of earnings.
In February 2016, FASB issued ASU No. 2016-02, ‘‘Leases,’’ which is intended to establish a
comprehensive new lease accounting model. The new standard clarifies the definition of a lease, requires a dual
approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on
the balance sheet as a lease liability with a corresponding right-of-use asset. The new standard is effective for
interim and annual periods beginning after December 15, 2018, which means the first quarter of our fiscal year
2020. The new standard requires a modified retrospective transition for capital or operating leases existing at or
entered into after the beginning of the earliest comparative period presented in the financial statements. We are
currently reviewing the ASU and evaluating the potential impact on our financial statements.
In March 2016, FASB issued ASU No. 2016-09, ‘‘Compensation - Stock Compensation: Improvements to
Employee Share-Based Payment Accounting,’’ which is intended to simplify several aspects of the accounting for
share-based payment transactions, including the income tax consequences, classification of awards as either
equity or liabilities, and classification on the statement of cash flows. This ASU became effective for the
Company on March 1, 2017. The adoption of this ASU did not have a material impact on the Company’s
financial position, results of operations and cash flows.
In June 2016, FASB issued ASU No. 2016-13 ‘‘Financial Instruments—Credit Losses’’, which requires a
financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount
expected to be collected. The new standard is effective for fiscal years beginning after December 15, 2019,
including interim periods within those fiscal years, which means the first quarter of our fiscal year 2021. We
expect the implementation of this ASU will not have a significant impact on our financial statements.
In August 2016, FASB issued ASU No. 2016-15 ‘‘Statement of Cash Flows - Classification of Certain Cash
Receipts and Cash Payments.’’ The guidance’s objective is to reduce diversity in practice of how certain cash
receipts and cash payments are presented and classified in the statement of cash flow. The new standards
required date of adoption is effective for fiscal years beginning after December 15, 2017, which means the first
quarter of our fiscal year 2019. Adoption and restatement of the cash flow statement for the new standard is not
expected to be material.
In May 2017, FASB issued ASU 2017-09, ‘‘Compensation - Stock Compensation (Topic 718): Scope of
Modification Accounting.’’ This update amends the scope of modification accounting surrounding share-based
payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which
would trigger modification accounting for share-based payment awards. This ASU is effective for annual periods
beginning after December 15, 2017, and interim periods within those annual periods, which means the first
quarter of our fiscal year 2019. We do not expect the adoption of ASU 2017-09 to have a material effect on our
financial position, results of operations and cash flows.
On December 22, 2017, the Securities Exchange Commission staff issued Staff Accounting Bulletin No. 118
(‘‘SAB 118’’), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act of 2017
(‘‘Tax Act’’). SAB 118 provides for a measurement period that may not extend beyond one year from the Tax
Act enactment date for companies to complete the required accounting under ASC 740. In accordance with
14
SAB 118, a company must reflect, as of the end of the accounting period that includes the date of enactment of
the Tax Act, only those income tax effects of the Tax Act for which the accounting under ASC 740 is complete.
To the extent that the company’s accounting for certain income tax effects of the Tax Act is incomplete, but the
company is able to determine a reasonable estimate, the company must record a provisional estimate in the
financial statements. If the company cannot determine a provisional estimate, it must continue to apply ASC 740
on the basis of the provisions of the tax law that were in effect immediately before the enactment of the Tax Act.
At February 28, 2018, our accounting for the Tax Act is complete under SAB 118. Forthcoming guidance, such
as regulations or technical corrections, could change how we interpreted provisions of the Tax Act.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company and are not required to provide this information.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 begins at page 22.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
Item 9A. CONTROLS AND PROCEDURES
An evaluation was performed of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15(a) as of February 28, 2018. This evaluation was conducted
under the supervision and with the participation of our management, including our Chief Executive Officer
(Principal Executive Officer) and our Chief Financial Officer and Corporate Secretary (Principal Financial and
Accounting Officer).
Based on that evaluation, these officers concluded that our disclosure controls and procedures were effective
to ensure that information required to be disclosed in reports that we file or submit under the Securities
Exchange Act of 1934 (the ‘‘Exchange Act’’) is accumulated and communicated to them, as appropriate, to allow
timely decisions regarding required disclosure and is recorded, processed, summarized and reported in
accordance within the time periods specified in SEC rules and forms. It should be noted that the design of any
system of controls is based in part upon certain assumptions about the likelihood of future events.
During the fourth quarter of the fiscal year covered by this report on Form 10-K, there have been no
changes in our internal control over financial reporting that have materially affected or are reasonably likely to
materially affect, our internal control over financial reporting.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Under the supervision and with the
participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we
evaluated the effectiveness of our internal control over financial reporting based on the framework in
INTERNAL CONTROL-INTEGRATED FRAMEWORK issued by the Committee of Sponsoring Organizations
of the Treadway Commission in 1992. All internal control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate. Based on our evaluation under that
framework and applicable SEC rules, our management concluded that our internal control over financial
reporting was effective as of February 28, 2018. The original framework was updated with the issuance of the
2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Our management has not yet implemented the 2013 Framework, but does not deem it
impacting our effective assessment conclusion.
15
This annual report does not include an attestation report of our registered public accounting firm regarding
internal control over financial reporting. Management’s report was not subject to attestation by our registered
public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this
annual report.
Item 9B. OTHER INFORMATION
None
16
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Identification of Directors
The information required by this Item 10 is furnished by incorporation by reference to the information under
the caption ‘‘Election of Directors’’ in our definitive Proxy Statement to be filed in connection with the Annual
Meeting of Shareholders to be held on July 24, 2018.
(b) Identification of Executive Officers
The information required by this Item 10 is furnished by incorporation by reference to the information under
the caption ‘‘Executive Officers of the Registrant’’ in our definitive Proxy Statement to be filed in connection
with the Annual Meeting of Shareholders to be held on July 24, 2018.
(c) Compliance with Section 16 (a) of the Exchange Act
The information required by this Item 10 is furnished by incorporation by reference to the information under
the caption ‘‘Section 16 (a) Beneficial Ownership Reporting Compliance’’ in our definitive Proxy Statement to be
filed in connection with the Annual Meeting of Shareholders to be held on July 24, 2018.
Item 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is furnished by incorporation by reference to the information under
the caption ‘‘Executive Compensation’’ in our definitive Proxy Statement to be filed in connection with the
Annual Meeting of Shareholders to be held on July 24, 2018.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this Item 12 is furnished by incorporation by reference to the information under
the captions ‘‘Security Ownership of Certain Beneficial Owners and Management’’ and ‘‘Compensation Plans’’ in
our definitive Proxy Statement to be filed in connection with the Annual Meeting of Shareholders to be held on
July 24, 2018.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
Item 14. PRINCIPAL ACCOUNTANT’S FEES AND SERVICES
The information required by this Item 14 is furnished by incorporation by reference to the information under
the caption ‘‘Independent Registered Public Accountants’’ in our definitive Proxy Statement to be filed in
connection with the Annual Meeting of Shareholders to be held on July 24, 2018.
17
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this report:
1.
Financial Statements
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance Sheets as of February 28, 2018 and 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statements of Earnings for the Years ended February 28, 2018 and 2017. . . . . . . . . . . . . . . . . . . . . . . . .
Statements of Shareholders’ Equity for the Years ended February 28, 2018 and 2017 . . . . . . . . . . . . . . .
Statements of Cash Flows for the Years ended February 28, 2018 and 2017 . . . . . . . . . . . . . . . . . . . . . .
Page
22
23
24
25
26
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27-37
Schedules have been omitted as such information is either not required or is included in the financial
statements.
2.
Exhibits
3.1
3.2
3.3
3.4
3.5
3.6
4.1
Restated Certificate of Incorporation dated April 26, 1968 and Certificate of Amendment thereto dated
June 21, 1968 are incorporated herein by reference to Exhibit 1 to Registration Statement on Form 10-K
(File No. 0-4957).
Certificate of Amendment of Restated Certificate of Incorporation dated August 27, 1977 is incorporated
herein by reference to Exhibit 20.1 to Form 10-K for fiscal year ended February 28, 1981
(File No. 0-4957).
By-Laws, as amended, are incorporated herein by reference to Exhibit 20.2. to Form 10-K for fiscal year
ended February 28, 1981 (File No. 0-4957).
Certificate of Amendment of Restated Certificate of Incorporation dated November 17, 1986 is
incorporated herein by reference to exhibit 3.3 to Form 10-K for fiscal year ended February 28, 1987
(File No. 0-4957).
Certificate of Amendment of Restated Certificate of Incorporation dated March 22, 1996 is incorporated
herein by reference to Exhibit 3.4 to Form 10-K for fiscal year ended February 28, 1997
(File No. 0-4957).
Certificate of Amendment of Restated Certificate of Incorporation dated July 15, 2002 is incorporated
herein by reference to Exhibit 10.30 to Form 10-K dated February 28, 2003 (File No. 0-4957).
Specimens of Common Stock Certificates are incorporated herein by reference to Exhibits 3.1 and 3.2 to
Registration Statement on Form 10-K (File No. 0-4957) filed June 29, 1970.
10.1 Usborne Agreement-Contractual agreement by and between the Company and Usborne Publishing Limited
dated November 25, 1988 is incorporated herein by reference to Exhibit 10.12 to Form 10-K dated
February 28, 1989 (File No. 0-4957).
18
10.2
Party Plan-Contractual agreement by and between the Company and Usborne Publishing Limited dated
March 14, 1989 is incorporated herein by reference to Exhibit 10.13 to Form 10-K dated February 28,
1989 (File No. 0-4957).
10.3 Amendment dated January 1, 1992 to Usborne Agreement - Contractual agreement by and between the
Company and Usborne Publishing Limited is incorporated herein by reference to Exhibit 10.13 to
Form 10-K dated February 29, 1992 (File No. 0-4957).
10.4
Educational Development Corporation 2002 Incentive Stock Option Plan is incorporated herein by
reference to Exhibit A to definitive proxy statement on Schedule 14A dated May 23, 2002
(File No. 0-4957).
10.5 Amendment dated November 12, 2002 to Usborne Agreement – Contractual agreement by and between us
and Usborne Publishing Limited is incorporated herein by reference to Exhibit 10.32 to Form 10-K dated
February 28, 2003 (File No. 0-4957).
10.6
Employment Agreement between Randall W. White and the Company dated February 28, 2004
incorporated herein by reference to Exhibit 10.8 to Form 10-K dated February 28, 2005 (File No. 04957).
10.7
Loan Agreement dated December 1, 2015 by and between the Company and MidFirst Bank, Tulsa, OK
10.8
Purchase and Sale Agreement dated October 1, 2015 by and between the Company and Hilti, Inc., Tulsa,
OK
10.9
Lease Agreement dated December 1, 2015 by and between the Company and Hilti, Inc., Tulsa, OK
10.10 First Amendment Loan Agreement dated March 10, 2016 by and between the Company and MidFirst
Bank, Tulsa, OK
10.11 Second Amendment Loan Agreement dated June 15, 2016 by and between the Company and MidFirst
Bank, Tulsa, OK
10.12 Third Amendment Loan Agreement dated June 28, 2016 by and between the Company and MidFirst
Bank, Tulsa, OK
10.13 Fourth Amendment Loan Agreement dated February 7, 2017 by and between the Company and MidFirst
Bank, Tulsa, OK
10.14 Fifth Amendment Loan Agreement dated June 12, 2017 by and between the Company and MidFirst Bank,
Tulsa, OK incorporated herein by reference to Exhibit 10.01 to Form 8-K dated June 15, 2017
(File No. 04957).
10.15 Sixth Amendment Loan Agreement dated September 1, 2017 by and between the Company and MidFirst
Bank, Tulsa, OK incorporated herein by reference to Exhibit 10.01 to Form 8-K dated September 7, 2017
(File No. 04957).
10.16 Seventh Amendment Loan Agreement dated February 16, 2018 by and between the Company and
MidFirst Bank, Tulsa, OK incorporated herein by reference to Exhibit 10.01 to Form 8-K dated
February 22, 2018 (File No. 04957).
*23.1 Consent of Independent Registered Public Accounting Firm.
19
*31.1 Certification of the Chief Executive Officer of Educational Development Corporation pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2 Certification of the Chief Financial Officer and Corporate Secretary (Principal Financial and Accounting
Officer) of Educational Development Corporation pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
*32.1 Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
*
Filed Herewith
Item 16. FORM 10-K SUMMARY
Not applicable
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(b) of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EDUCATIONAL DEVELOPMENT CORPORATION
Date: May 29, 2018
By
/s/ Dan E. O’Keefe
Dan E. O’Keefe
Chief Financial Officer and Corporate
Secretary
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the date indicated.
Date: May 29, 2018
/s/ Randall W. White
Randall W. White
Chairman of the Board, President and Director
(Principal Executive Officer)
May 29, 2018
/s/ John A. Clerico
John A. Clerico, Director
May 29, 2018
/s/ Ronald McDaniel
Ronald McDaniel, Director
May 29, 2018
/s/ Kara Gae Neal
Kara Gae Neal, Director
May 29, 2018
/s/ Betsy Richert
Betsy Richert, Director
May 29, 2018
/s/ Dan E. O’Keefe
Dan E. O’Keefe
Chief Financial Officer and Corporate
Secretary
(Principal Financial and Accounting Officer)
21
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
Educational Development Corporation
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Educational Development Corporation (the Company) as of
February 28, 2018 and 2017, and the related statements of earnings, shareholders’ equity and cash flows for the
years then ended, and the related notes to the financial statements (collectively, the financial statements). In our
opinion, the financial statements present fairly, in all material respects, the financial position of the Company as
of February 28, 2018 and 2017, and the results of its operations and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on the Company’s financial statements based on our audits. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to
be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the auditing standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits we are required to
obtain an understanding of internal control over financial reporting but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express
no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
/s/ HOGANTAYLOR LLP
We have served as the Company’s auditor since 2005.
Tulsa, Oklahoma
May 29, 2018
22
EDUCATIONAL DEVELOPMENT CORPORATION
BALANCE SHEETS
AS OF FEBRUARY 28,
ASSETS
CURRENT ASSETS:
2018
2017
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, less allowance for doubtful accounts and sales
returns $675,600 (2018) and $675,000 (2017) . . . . . . . . . . . . . . . . . . . . .
Inventories—Net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 2,723,300
$
699,200
2,813,800
26,618,500
1,142,000
33,297,600
2,917,000
34,253,100
695,200
38,564,500
INVENTORIES—Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
435,900
192,100
PROPERTY, PLANT AND EQUIPMENT—Net . . . . . . . . . . . . . . . . . . . . . . .
27,860,500
27,034,300
DEFERRED INCOME TAXES—Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
128,000
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,900
61,400
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 61,620,900
$ 65,980,300
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Line of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current maturities of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued salaries and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LONG-TERM DEBT—Net of current maturities. . . . . . . . . . . . . . . . . . . . . . .
DEFERRED INCOME TAXES—Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER LONG-TERM LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 12,469,000
—
693,000
881,200
2,007,900
1,798,800
3,300,900
21,150,800
19,825,100
136,900
106,000
41,218,800
$ 17,565,300
4,882,900
633,100
898,500
1,379,700
1,519,400
3,218,200
30,097,100
20,665,800
—
—
50,762,900
COMMITMENTS (Note 8)
SHAREHOLDERS’ EQUITY:
Common stock, $0.20 par value; Authorized 8,000,000 shares; Issued
6,046,040 (2018) and 6,041,040 (2017) shares; Outstanding 4,089,806
(2018) and 4,090,074 (2017) shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital in excess of par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY . . . . . . . . . . . . . .
1,209,200
8,573,300
21,532,500
31,315,000
(10,912,900)
20,402,100
$ 61,620,900
1,208,200
8,548,000
16,317,800
26,074,000
(10,856,600)
15,217,400
$ 65,980,300
See notes to financial statements.
23
EDUCATIONAL DEVELOPMENT CORPORATION
STATEMENTS OF EARNINGS
FOR THE YEARS ENDED FEBRUARY 28,
GROSS SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less discounts and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COST OF GOODS SOLD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018
2017
$125,847,200
(24,928,800)
11,047,700
111,966,100
30,931,300
81,034,800
$124,958,900
(29,486,300)
11,155,500
106,628,100
28,613,500
78,014,600
OPERATING EXPENSES:
Operating and selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,571,200
35,359,000
15,736,300
—
73,666,500
23,070,000
33,995,500
15,920,600
1,082,300
74,068,400
INTEREST EXPENSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,119,500
(1,583,900)
1,028,800
(1,694,700)
EARNINGS BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,832,700
4,612,100
INCOME TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,618,000
1,751,200
NET EARNINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
5,214,700
$
2,860,900
BASIC AND DILUTED EARNINGS PER SHARE:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
1.28
1.27
$
$
0.70
0.70
WEIGHTED AVERAGE NUMBER OF COMMON AND EQUIVALENT
SHARES OUTSTANDING:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,087,998
4,090,661
4,077,695
4,082,854
Dividends per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.00
$
0.27
See notes to financial statements.
24
EDUCATIONAL DEVELOPMENT CORPORATION
STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED FEBRUARY 28,
Common Stock
(par value $0.20 per share)
Number of
Shares
Issued
Amount
Capital in
Excess of
Par Value
Treasury Stock
Retained
Earnings
Number of
Shares
Amount
Shareholders’
Equity
BALANCE—
March 1, 2016 . . . . . . . . . . . . .
Purchases of treasury stock . . . .
Sales of treasury stock . . . . . . .
Dividends paid ($0.27/share) . . .
Net earnings . . . . . . . . . . . . . . .
BALANCE—
February 28, 2017. . . . . . . . . . .
Exercise of stock options . . . . .
Purchases of treasury stock . . . .
Sales of treasury stock . . . . . . .
Net earnings . . . . . . . . . . . . . . .
BALANCE—
February 28, 2018. . . . . . . . . . .
6,041,040
—
—
—
—
$1,208,200 $8,548,000 $14,557,500 1,976,430 $(11,084,200) $13,229,500
(200)
227,800
— (1,100,600)
— 2,860,900
—
—
— (1,100,600)
— 2,860,900
23
—
— (25,487)
—
—
(200)
227,800
—
—
—
—
6,041,040
$1,208,200 $8,548,000 $16,317,800 1,950,966 $(10,856,600) $15,217,400
5,000
—
—
—
1,000
—
—
—
—
25,300
—
—
—
—
— 5,214,700
—
10,069
(4,801)
—
—
(98,400)
42,100
26,300
(98,400)
42,100
— 5,214,700
6,046,040
$1,209,200 $8,573,300 $21,532,500 1,956,234 $(10,912,900) $20,402,100
See notes to financial statements.
25
EDUCATIONAL DEVELOPMENT CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED FEBRUARY 28,
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net earnings to net cash provided by (used in)
operating activities:
Impairment of asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for doubtful accounts and sales returns . . . . . . . . . . . . . . . . . . . .
Provision for inventory valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . .
Changes in assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable, accrued salaries and commissions, and other
liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . .
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash received from sale of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash used to purchase treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from the issuance of stock options . . . . . . . . . . . . . . . . . . . . . . . .
Net borrowings (payments) under line of credit. . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . .
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . .
CASH AND CASH EQUIVALENTS—BEGINNING OF YEAR. . . . . . . . . .
2018
2017
$ 5,214,700
$ 2,860,900
—
1,251,000
264,900
510,900
311,800
(407,700)
7,079,000
(412,300)
(4,918,900)
59,900
279,400
4,018,000
9,232,700
(1,437,700)
(1,437,700)
(1,877,000)
1,019,000
42,100
(98,400)
26,300
(4,882,900)
—
(5,770,900)
2,024,100
699,200
1,082,300
1,079,000
221,100
283,200
(25,000)
(686,900)
(16,771,700)
533,500
11,427,000
(2,292,100)
716,300
(4,433,300)
(1,572,400)
(2,485,400)
(2,485,400)
(738,500)
4,000,000
227,800
(200)
—
1,551,100
(1,466,900)
3,573,300
(484,500)
1,183,700
CASH AND CASH EQUIVALENTS—END OF YEAR. . . . . . . . . . . . . . . . .
$ 2,723,300
$
699,200
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,116,500
$ 1,005,200
Cash paid for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 2,073,600
$
543,800
NON-CASH TRANSACTIONS:
Accrued capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
639,500
$
—
See notes to financial statements.
26
EDUCATIONAL DEVELOPMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED FEBRUARY 28, 2018 AND 2017
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business—Educational Development Corporation (‘‘we’’, ‘‘our’’, ‘‘us’’, or ‘‘the Company’’)
distributes books and publications through our Usborne Books & More (‘‘UBAM’’) and EDC Publishing
(‘‘Publishing’’) divisions to individual consumers, book, toy and gift stores, libraries and home educators located
throughout the United States (‘‘U.S.’’). We are the exclusive U.S. trade co-publisher of books and related items,
published by Usborne Publishing Limited (‘‘Usborne’’), an England-based publishing company, our largest
supplier. We are also a publishing company through our ownership of Kane Miller Book Publisher (‘‘Kane
Miller’’).
Estimates—Our financial statements were prepared in conformity with generally accepted accounting
principles in the United States of America, which requires management to make estimates and assumptions that
affect the amounts and disclosures in the financial statements. Actual results could differ from these estimates.
Reclassifications—Certain reclassifications have been made to the fiscal 2017 balance sheet and statement
of earnings to conform to the classifications used in fiscal 2018. These reclassifications had no effect on net
earnings.
Business Concentration—A significant portion of our inventory purchases are concentrated with Usborne.
Purchases from them were approximately $15.1 million and $34.8 million for the years ended February 28, 2018
and 2017, respectively. Total inventory purchases for those same periods were approximately $24.5 million and
$45.4 million, respectively. As of February 28, 2018, our outstanding accounts payable due to Usborne was
$5.3 million.
Cash and Cash Equivalents—Cash and cash equivalents are maintained at financial institutions and, at
times, balances may exceed federally insured limits of $250,000. We have never experienced any losses related
to these balances. The majority of payments due from banks for third party credit card transactions process
within two business days. These amounts due are classified as cash and cash equivalents. Cash and cash
equivalents also include demand and time deposits, money market funds and other marketable securities with
maturities of three months or less when acquired.
Accounts Receivable—Accounts receivable are uncollateralized customer obligations due under normal trade
terms, generally requiring payment within thirty days from the invoice date. Extended payment terms are offered
at certain times of the year for orders that meet minimum quantities or amounts. Accounts receivable are stated
at the amount management expects to collect from outstanding balances. Delinquency fees are not assessed.
Payments of accounts receivable are allocated to the specific invoices identified on the customers’ remittance
advice. Accounts receivable are carried at original invoice amount less an estimated reserve made for returns and
discounts based on quarterly review of historical rates of returns and expected discounts to be taken. The
carrying amount of accounts receivable is reduced, if needed, by a valuation allowance that reflects
management’s best estimate of the amounts that will not be collected.
Accounts receivable also include consignment inventory balances of inactive consultants as the Company
considers these amounts to be collectable directly from the inactive consultants either through payment or the
return of titles consigned.
Management periodically reviews accounts receivable balances and, based on an assessment of historical
bad debts, current customer receivable balances, age of customer receivable balances, customers’ financial
conditions and current economic trends, estimates the portion of the balance that will not be collected.
Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation
account based on its assessment of the current status of the individual accounts. Balances which remain
outstanding after management has used reasonable collection efforts are written off through a charge to the
valuation allowance and a credit to accounts receivable. Recoveries of accounts receivable previously written off
are recorded as income when received.
Management has estimated an allowance for doubtful accounts and sales returns of $675,600 and
$675,000 as of February 28, 2018 and 2017, respectively. Included within this allowance is $278,500 and
27
$217,000 of reserve related to consignment inventory held by inactive consultants, $100,000 and $190,000 of
reserve related to sales returns, and $93,900 and $98,500 of reserve for vendor discounts to sell remaining
inventory as of February 28, 2018 and 2017, respectively.
Inventories—Inventories are stated at the lower of cost or net realizable value. Cost is determined using the
average costing method. We present a portion of our inventory as a noncurrent asset. Occasionally we purchase
book inventory in quantities in excess of what will be sold within the normal operating cycle due to minimum
order requirements of our primary supplier. These excess quantities are included in noncurrent inventory. We
estimate noncurrent inventory using the current year turnover ratio by title. All inventory in excess of 2½ years
of anticipated sales is classified as noncurrent inventory.
Consultants that meet certain eligibility requirements are allowed to receive inventory on consignment.
Consignment inventory is stated at cost, less an estimated reserve for consignment inventory that is not expected
to be sold or returned to the Company. The total value of inventory on consignment with active consultants was
$1,270,700 and $1,140,700 at February 28, 2018 and 2017, respectively. The Company has reserved for
consignment inventory not expected to be sold or returned of $181,500 and $25,000 as of February 28, 2018 and
2017, respectively. Inventory related to inactive consultants is reclassified to accounts receivables and amounted
to $278,500 and $309,000 at February 28, 2018 and 2017, respectively. Such inventory is subject to a reserve
based on estimated amounts that will not be sold or returned. This reserve is included in the Allowance for
Doubtful Accounts.
Inventories are presented net of a valuation allowance, which includes reserves for inventory obsolescence
and active consultant consignment inventory that is not expected to be sold or returned. Management estimates
the allowance for both current and noncurrent inventory. The allowance is based on management’s identification
of slow moving inventory and estimated consignment inventory that will not be sold or returned.
Property, Plant and Equipment—Property, plant and equipment are stated at cost and depreciated on a
straight-line basis over the estimated useful lives, as follows:
Building
Building improvements
Machinery and equipment
Furniture and fixtures
30 years
10 – 15 years
3 – 15 years
3 years
Capitalized projects that are not placed in service are recorded as in progress and are not depreciated until
the related assets are placed in service.
Impairments of Long-Lived Assets—We review the value of long-lived assets for possible impairment
whenever events or changes in circumstances indicate that the carrying value of the assets may not be
recoverable based on estimated cash flows. Such indicators include, among others, the nature of the asset, the
projected future economic benefit of the asset, historical and future cash flows and profitability measurements. If
the carrying value of an asset exceeds the future undiscounted cash flows expected from the asset, we recognize
an impairment charge for the excess of carrying value of the asset over its estimated fair value. Determination as
to whether and how much an asset is impaired involves management estimates and can be impacted by other
uncertainties. We recorded impairment loss of $1.1 million to long-lived assets in our UBAM segment in the
fourth quarter of fiscal year 2017 (Note 4). No impairment was noted during fiscal year 2018.
Income Taxes—We account for income taxes using the liability method. Under this method, deferred tax
assets and liabilities are determined based on the difference between the financial statement and the tax basis of
assets and liabilities using the current tax laws and rates. A valuation allowance is established when necessary to
reduce deferred tax assets to the amounts that are ‘‘more likely than not’’ to be realized.
Revenue Recognition—The New Revenue Standard will be effective for the Company in the first quarter of
fiscal 2019. The Company is evaluating the adoption methodology and the impact on its financial position,
results of operations and cash flows. This includes a review of current accounting policies and practices to
identify potential differences that would result from applying the guidance. While this evaluation is in progress,
and the impact is not fully assessed, the Company expects this standard will not result in material changes.
Sales are generally recognized and recorded when products are shipped. Products are shipped FOB shipping
point. UBAM’s sales are generally paid at the time the product is ordered. Sales which have been paid for but
28
not shipped are classified as deferred revenue on the balance sheet. Sales associated with consignment inventory
are recognized when reported and payment associated with the sale has been remitted. Transportation revenue
represents the amount billed to the customer for shipping the product and is recorded when the product is
shipped.
Estimated allowances for sales returns are recorded as sales are recognized. Management uses a moving
average calculation to estimate the allowance for sales returns. We are not responsible for product damaged in
transit or damaged at customer locations. It is industry practice to accept returns from retail customers for
non-damaged products. Management has estimated and included a reserve for sales returns of $100,000 and
$190,000 for the fiscal years ended February 28, 2018 and 2017, respectively.
Advertising Costs—Advertising costs are expensed as incurred. Advertising expenses, included in general
and administrative expenses in the statements of earnings, were $546,600 and $266,400 for the years ended
February 28, 2018 and 2017, respectively.
Shipping and Handling Costs—We classify shipping and handling costs as operating and selling expenses
in the statements of earnings. Shipping and handling costs were $15,990,800 and $16,637,500 for the years
ended February 28, 2018 and 2017, respectively.
Interest Expense—Interest related to our outstanding debt is recognized as incurred. Interest expense,
classified separately in the statements of earnings, were $1,119,500 and $1,028,800 for the years ended
February 28, 2018 and 2017, respectively.
Earnings per Share—Basic earnings per share (‘‘EPS’’) is computed by dividing net earnings by the
weighted average number of common shares outstanding during the period. Diluted EPS is based on the
combined weighted average number of common shares outstanding and dilutive potential common shares
issuable which include, where appropriate, the assumed exercise of options. In computing Diluted EPS, we have
utilized the treasury stock method.
The computation of weighted average common and common equivalent shares used in the calculation of
basic and diluted EPS is shown below.
Year Ended February 28,
2018
2017
Earnings Per Share:
Net earnings applicable to common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,214,700
$2,860,900
Shares:
Weighted average shares outstanding–basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assumed exercise of options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,087,998
2,663
4,077,695
5,159
Weighted average shares outstanding–diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,090,661
4,082,854
Diluted Earnings Per Share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
1.28
1.27
$
$
0.70
0.70
Stock-Based Compensation—Share-based payment transactions with employees, such as stock options and
restricted stock, are measured at estimated fair value at date of grant and recognized as compensation expense
over the requisite service period, net of estimated forfeitures.
New Accounting Pronouncements—The Financial Accounting Standards Board (‘‘FASB’’) periodically
issues new accounting standards in a continuing effort to improve standards of financial accounting and
reporting. We have reviewed the recently issued pronouncements and concluded that the following recently
issued accounting standard updates (‘‘ASU’’) apply to us.
In May 2014, FASB issued ASU No. 2014-09, and amended with ASU No. 2015-14 ‘‘Revenue from
Contracts with Customers,’’ which provides a single revenue recognition model which is intended to improve
29
comparability over a range of industries, companies and geographical boundaries and will also result in enhanced
disclosures. The changes are effective for fiscal years, and interim periods within those years, beginning after
December 15, 2017, which means the first quarter of our fiscal year 2019. We do not expect the adoption of this
ASU will have a significant impact on the Company’s financial position, results of operations and cash flows.
In July 2015, FASB issued ASU No. 2015-11 ‘‘Inventory - Simplifying the Measurement of Inventory’’,
which is intended to allow measurement of inventory at the lower of cost and net realizable value. Net realizable
value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of
completion, disposal, and transportation. This ASU became effective for the Company on March 1, 2017. The
adoption of this ASU did not have a material impact on the Company’s financial position, results of operations
and cash flows.
In November 2015, FASB issued ASU No. 2015-17, ‘‘Income Taxes - Balance Sheet Classification of
Deferred Taxes,’’ which is intended to improve how deferred taxes are classified on organizations’ balance sheets
by eliminating the current requirement for organizations to present deferred tax liabilities and assets as current
and noncurrent in a classified balance sheet. Instead, organizations will now be required to classify all deferred
tax assets and liabilities as noncurrent. The changes are effective for financial statements issued for annual
periods beginning after December 15, 2016, and interim periods within those annual periods, which means the
first quarter of our fiscal year 2018. We have retrospectively implemented this new presentation in our financial
statements. As of February 28, 2017, we reclassified $466,600 of current deferred tax assets to noncurrent assets
and netted $338,600 of deferred tax liabilities against the balance on the balance sheet. The adoption of this ASU
did not affect our statements of earnings.
In February 2016, FASB issued ASU No. 2016-02, ‘‘Leases,’’ which is intended to establish a
comprehensive new lease accounting model. The new standard clarifies the definition of a lease, requires a dual
approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on
the balance sheet as a lease liability with a corresponding right-of-use asset. The new standard is effective for
interim and annual periods beginning after December 15, 2018, which means the first quarter of our fiscal year
2020. The new standard requires a modified retrospective transition for capital or operating leases existing at or
entered into after the beginning of the earliest comparative period presented in the financial statements. We are
currently reviewing the ASU and evaluating the potential impact on our financial statements.
In March 2016, FASB issued ASU No. 2016-09, ‘‘Compensation - Stock Compensation: Improvements to
Employee Share-Based Payment Accounting,’’ which is intended to simplify several aspects of the accounting for
share-based payment transactions, including the income tax consequences, classification of awards as either
equity or liabilities, and classification on the statement of cash flows. This ASU became effective for the
Company on March 1, 2017. The adoption of this ASU did not have a material impact on the Company’s
financial position, results of operations and cash flows.
In June 2016, FASB issued ASU No. 2016-13 ‘‘Financial Instruments—Credit Losses’’, which requires a
financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount
expected to be collected. The new standard is effective for fiscal years beginning after December 15, 2019,
including interim periods within those fiscal years, which means the first quarter of our fiscal year 2021. We
expect the implementation of this ASU will not have a significant impact on our financial statements.
In August 2016, FASB issued ASU No. 2016-15 ‘‘Statement of Cash Flows - Classification of Certain Cash
Receipts and Cash Payments.’’ The guidance’s objective is to reduce diversity in practice of how certain cash
receipts and cash payments are presented and classified in the statement of cash flow. The new standards
required date of adoption is effective for fiscal years beginning after December 15, 2017, which means the first
quarter of our fiscal year 2019. Adoption and restatement of the cash flow statement for the new standard is not
expected to be material.
In May 2017, FASB issued ASU 2017-09, ‘‘Compensation - Stock Compensation (Topic 718): Scope of
Modification Accounting.’’ This update amends the scope of modification accounting surrounding share-based
payment arrangements as issued in ASU 2016-09 by providing guidance on the various types of changes which
would trigger modification accounting for share-based payment awards. This ASU is effective for annual periods
beginning after December 15, 2017, and interim periods within those annual periods, which means the first
quarter of our fiscal year 2019. We do not expect the adoption of ASU 2017-09 to have a material effect on our
financial position, results of operations and cash flows.
30
On December 22, 2017, the Securities Exchange Commission staff issued Staff Accounting Bulletin No. 118
(‘‘SAB 118’’), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act of 2017
(‘‘Tax Act’’). SAB 118 provides for a measurement period that may not extend beyond one year from the Tax
Act enactment date for companies to complete the required accounting under ASC 740. In accordance with
SAB 118, a company must reflect, as of the end of the accounting period that includes the date of enactment of
the Tax Act, only those income tax effects of the Tax Act for which the accounting under ASC 740 is complete.
To the extent that the company’s accounting for certain income tax effects of the Tax Act is incomplete, but the
company is able to determine a reasonable estimate, the company must record a provisional estimate in the
financial statements. If the company cannot determine a provisional estimate, it must continue to apply ASC 740
on the basis of the provisions of the tax law that were in effect immediately before the enactment of the Tax Act.
At February 28, 2018, our accounting for the Tax Act is complete under SAB 118. Forthcoming guidance, such
as regulations or technical corrections, could change how we interpreted provisions of the Tax Act.
2.
INVENTORIES
Inventories consist of the following:
February 28,
2018
2017
Current:
Book inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$26,800,000
(181,500)
$34,278,100
(25,000)
Inventories net–current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$26,618,500
$34,253,100
Noncurrent:
Book inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories net–noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
707,700
(271,800)
435,900
$
$
467,100
(275,000)
192,100
3.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
February 28,
2018
2017
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 4,107,200
20,321,800
1,758,800
7,231,300
109,000
$ 4,107,200
20,321,800
1,692,500
5,230,700
101,600
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,528,100
(5,667,600)
31,453,800
(4,419,500)
$27,860,500
$27,034,300
During fiscal year 2018, the Company purchased and installed new warehouse equipment and made
software enhancements to increase its daily shipping capacity.
4.
IMPAIRMENT
Beginning in fiscal 2015, the Company began working with a third-party to develop an integrated
direct-sales order system. This system was to be used by the Company’s independent sales consultants to assist
them in order processing, payment collection, genealogy tracking, and commission reporting among other
features. Our sales consultants started using the new system during the third quarter of fiscal 2017.
During the fourth quarter of fiscal year 2017 it was concluded that the system was not fulfilling the needs
of the direct-sales program. Management evaluated various alternatives, but ultimately concluded it was
31
necessary to abandon the system as it became clear the third-party developer would be unable to get the system
to operate as originally intended. As a result, we reverted to our original web-based proprietary system and
recognized an impairment loss of $1.1 million, as it was determined that the system had no fair value as a result
of being abandoned.
5. OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
Accrued royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued UBAM incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued freight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 791,800
633,800
357,800
557,600
959,900
$ 721,600
1,180,400
494,900
425,700
395,600
$3,300,900
$3,218,200
February 28,
2018
2017
6.
INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax
effects of significant items comprising our net deferred tax assets and liabilities are as follows:
February 28,
2018
2017
Deferred tax assets:
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory overhead capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory valuation allowance – noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for sales returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital loss carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 149,600
69,800
47,200
70,700
26,000
111,900
141,700
$ 164,600
131,000
9,500
104,500
72,200
163,600
89,300
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
616,900
734,700
Less valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(111,900)
(163,600)
Subtotal deferred tax assets:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
505,000
571,100
Deferred tax liabilities:
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(641,900)
(641,900)
(443,100)
(443,100)
Net deferred income tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(136,900)
$ 128,000
On December 22, 2017, President Trump signed into law the Tax Act. Among its provisions, the Tax Act
reduces the statutory U.S. Corporate income tax rate from a maximum rate of 35% to 21% effective January 1,
2018. The Tax Act also provides for accelerated deductions of certain capital expenditures made after
September 27, 2017 through bonus depreciation. Upon the enactment of the Tax Act, we recorded a reduction in
our deferred income tax liabilities of $43,200 for the effect of the aforementioned change in the U.S. statutory
income tax rate. The application of the Tax Act may change due to regulations subsequently issued by the
U.S. Treasury Department.
32
Management has assessed the evidence to estimate whether sufficient future capital gains will be generated
to utilize the existing capital loss carryforward. As no current expectation of capital gains exists, management has
determined that a valuation allowance is necessary to reduce the carrying value of the capital loss carryforward
deferred tax asset as it is ‘‘more likely than not’’ that such assets are unrealizable.
The amount of the deferred tax asset considered realizable, however, could be adjusted if future capital
gains are generated during the carryforward period which ends February 28, 2019. Management has determined
that no valuation allowance is necessary to reduce the carrying value of other deferred tax assets as it is ‘‘more
likely than not’’ that such assets are realizable.
The components of income tax expense are as follows:
Current:
Federal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,964,700
388,400
$1,267,600
262,500
February 28,
2018
2017
Deferred:
Federal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,353,100
1,530,100
239,800
25,100
264,900
186,200
34,900
221,100
Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,618,000
$1,751,200
The following reconciles our expected income tax rate to the U.S. federal statutory income tax rate:
U.S. federal statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. state and local income taxes–net of federal benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 28,
2018
2017
31.8% 34.0%
4.0%
4.0%
0.0%
(2.4)%
Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33.4% 38.0%
Our U.S. federal statutory income tax rate declined from 34.0% to 21.0% as of January 1, 2018. As our
fiscal year ends February 28, 2018, our effective tax rate for fiscal 2018 was a blended rate of 31.8%. We file
our tax returns in the U.S. and certain state jurisdictions. We are no longer subject to income tax examinations by
tax authorities for fiscal years before 2013.
Based upon a review of our income tax filing positions, we believe that our positions would be sustained
upon an audit and do not anticipate any adjustments that would result in a material change to our financial
position. Therefore, no reserves for uncertain income tax positions have been recorded. We classify interest and
penalties associated with income taxes as a component of income tax expense on the statements of earnings.
7. EMPLOYEE BENEFIT PLAN
We have a profit sharing plan that incorporates the provisions of Section 401(k) of the Internal Revenue
Code. The 401(k) plan covers substantially all employees meeting specific age and length of service
requirements. Matching contributions are discretionary and amounted to $89,400 and $61,200 during the fiscal
years ended February 28, 2018 and 2017, respectively. The 401(k) plan includes an option for employees to
invest in our stock, which is purchased from our treasury stock shares. Shares purchased for the 401(k) plan
from treasury stock amounted to 4,801 net shares and 25,487 net shares during the fiscal years ended
February 28, 2018 and 2017, respectively.
8. COMMITMENTS
In connection with the purchase our 400,000 square-foot facility on 40-acres, in 2015, we entered into a
15-year lease with the seller, a non-related third party, who leases 181,300 square feet, or 45.3% of the facility.
The lease is being accounted for as an operating lease.
33
The cost of the leased space upon acquisition was estimated at $10,159,000, which was also the carrying
cost as of February 28, 2018. The accumulated depreciation associated with the leased assets was $789,100 and
$438,700 for the fiscal years ended February 28, 2018 and 2017, respectively. Both the leased assets and
accumulated depreciation are included in property, plant and equipment-net in the balance sheets.
The lessee pays $110,100 per month, through the lease anniversary date of December 2018, with a 2.0%
annual increase adjustment on each anniversary date thereafter. The lease terms allow for one five-year extension,
which is not a bargain renewal option, at the expiration of the 15-year term. Revenue associated with the lease is
being recorded on a straight-line basis and is reported in other income on the statements of earnings.
The following table reflects future minimum rental income payments under the non-cancellable portion of
this lease as of February 28, 2018:
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ending
February 28
(29),
$ 1,324,800
1,351,300
1,378,300
1,405,900
1,434,000
12,269,300
$19,163,600
At February 28, 2018, we had outstanding purchase commitments for inventory totaling approximately
$18,906,600 which is due during fiscal year 2019. Of these commitments, $13,436,100 were with Usborne,
$5,339,100 with various Kane Miller publishers and the remaining $131,400 with other suppliers.
Rent expense for the year ended February 28, 2018 and 2017, was $53,400 and $69,500, respectively. As of
February 28, 2018, we did not have any lease commitments in excess of one year.
9. DEBT
Debt consists of the following:
February 28,
2018
2017
Line of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
— $ 4,882,900
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less current maturities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, net of current maturities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$20,706,300
(881,200)
$19,825,100
$21,564,300
(898,500)
$20,665,800
We have a Loan Agreement dated as of March 10, 2016 (as amended the ‘‘Loan Agreement’’) with MidFirst
Bank (‘‘the Bank’’) which includes multiple loans. Term Loan #1 is comprised of Tranche A totaling
$13.4 million and Tranche B totaling $5.0 million, both with the maturity date of December 1, 2025. Tranche A
has a fixed interest rate of 4.23% and interest is payable monthly. Tranche B interest is payable monthly at the
bank adjusted LIBOR Index plus a tiered pricing rate based on the Company’s Adjusted Funded Debt to
EBITDA Ratio (4.70% at February 28, 2018). Term Loan #1 is secured by the primary office, warehouse and
land. The outstanding borrowings on Tranche A were $12,453,300 and $12,902,800 at February 28, 2018 and
2017, respectively. The outstanding borrowings on Tranche B were $4,657,900 and $4,813,800 at February 28,
2018 and 2017, respectively.
We also have Term Loan #2 with the Bank in the amount of $4.0 million with the maturity date of June 28,
2021, and interest payable monthly at the bank adjusted LIBOR Index plus a tiered pricing rate based on the
Company’s Adjusted Funded Debt to EBITDA Ratio (4.70% at February 28, 2018). Term Loan #2 is secured by
our secondary warehouse and land. The Loan Agreement also provided a $15.0 million revolving loan (‘‘line of
credit’’) through June 15, 2018 with interest payable monthly at the bank adjusted LIBOR Index plus a tiered
pricing rate based on the Company’s Adjusted Funded Debt to EBITDA Ratio (4.70% at February 28, 2018). The
34
outstanding borrowings on Term Loan #2 were $3,595,100 and $3,847,700 at February 28, 2018 and 2017,
respectively. We had $0 and $4,882,900 in borrowings outstanding on line of credit at February 28, 2018 and
2017, respectively. Available credit under the revolving credit agreement was $9,424,000 at February 28, 2018
and $2,117,100 at February 28, 2017.
The Tranche B, the line of credit and the Term Loan #2 all accrue interest at a tiered rate based on our
Adjusted Funded Debt to EBITDA ratio which is payable monthly. The current pricing tier is as follows:
Pricing Tier
I
II
III
IV
Adjusted Funded Debt to EBITDA
Ratio
>3.00
>2.50 but <3.00
>2.00 but <2.50
<2.00
LIBOR Margin (bps)
350.50
337.50
325.00
312.50
Adjusted Funded Debt is defined as all long term and short-term bank debt less the outstanding balances of
Tranche A and Tranche B Term Loans. EBITDA is defined in the Loan Agreement as earnings before interest
expense, income tax expense (benefit) and depreciation and amortization expenses, reduced by rental income.
The $15.0 million line of credit is limited to advance rates on eligible receivables and eligible inventory levels.
The President and Chief Executive Officer and his wife have executed a Guaranty Agreement obligating
them to repay $3,680,000 of any unpaid Term Loans, unpaid accrued interest and any recourse amounts as
defined in the Continuing Guaranty Agreement.
The Loan Agreement contains a provision for our use of the Bank’s letters of credit. The Bank agrees to
issue, or obtain issuance of commercial or stand-by letters of credit provided that no letters of credit will have an
expiry date later than June 15, 2018, and that the sum of the line of credit plus the letters of credit would not
exceed the borrowing base in effect at the time. For the year ended February 28, 2018, we had no letters of
credit outstanding.
The Loan Agreement also contains provisions that require us to maintain specified financial ratios, restrict
transactions with related parties, prohibit mergers or consolidation, disallow additional debt, and limit the amount
of compensation, salaries, investments, capital expenditures, leasing transactions we can make on a quarterly
basis. Additionally, the Loan Agreement places limitations on the amount of dividends that may be distributed
and certain stock buyback transactions.
The following table reflects aggregate future maturities of long-term debt during the next five fiscal years
and thereafter as follows:
Year ending February 28 (29),
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
881,200
920,400
959,000
1,003,900
1,048,600
15,893,200
$20,706,300
10. CAPITAL STOCK, STOCK OPTIONS AND WARRANTS
The Board of Directors adopted the 2002 Incentive Stock Option Plan (the ‘‘2002 Plan’’) in June of 2002.
The 2002 Plan also authorized us to grant up to 1,000,000 stock options.
Options granted under the 2002 Plan vest at date of grant and are exercisable up to ten years from the date
of grant. The exercise price on options granted is equal to the market price at the date of grant. Options
outstanding at February 28, 2018 expire in December 2019.
35
A summary of the status of our 2002 Plan as of February 28, 2018 and 2017, and changes during the years
then ended is presented below:
Outstanding at beginning of Year . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 28,
2018
2017
Weighted
Average
Exercise
Price
$5.25
5.25
—
Shares
10,000
—
—
Weighted
Average
Exercise
Price
$5.25
—
—
Shares
10,000
5,000
—
Outstanding at End of Year. . . . . . . . . . . . . . . . . . . . . . . . . .
5,000
$5.25
10,000
$5.25
At February 28, 2018, all options outstanding are exercisable with an aggregate intrinsic value of $70,500
and weighted-average remaining contractual terms of options outstanding of 1.8 years.
11. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the quarterly results of operations for the years ended February 28, 2018 and
2017.
2018
Net
Revenues
Gross Margin
Net Earnings
Basic
Earnings
Per Share
Diluted
Earnings
Per Share
First quarter . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . .
Total year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 26,930,800
24,181,300
38,908,000
21,946,000
$111,966,100
$19,506,000
17,521,700
28,413,200
15,593,900
$81,034,800
$1,225,300
1,036,900
2,128,400
824,100
$5,214,700
2017
First quarter . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . .
Total year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 22,784,200
25,893,000
30,697,600
27,253,300
$106,628,100
$16,110,400
18,394,600
22,369,500
21,140,100
$78,014,600
$ 620,200
318,500
1,274,200
648,000
$2,860,900
$0.30
0.25
0.52
0.21
$1.28
$0.15
0.08
0.31
0.16
$0.70
$0.30
0.25
0.52
0.20
$1.27
$0.15
0.08
0.31
0.16
$0.70
12. BUSINESS SEGMENTS
We have two reportable segments, Publishing and UBAM, which are business units that offer different
methods of distribution to different types of customers. They are managed separately based on the fundamental
differences in their operations.
•
•
Publishing markets its products to retail accounts, which include book, school supply, toy and gift
stores and museums, through commissioned sales representatives, trade and specialty retailers and an
internal tele-sales group.
UBAM markets its products through a network of independent sales consultants using a combination of
home shows, internet shows, and book fairs.
The accounting policies of the segments are the same as those described in the summary of significant
accounting policies. We evaluate segment performance based on earnings (loss) before income taxes of the
segments, which is defined as segment net sales reduced by direct cost of sales and direct expenses. Corporate
expenses, depreciation, interest expense, other income and income taxes are not allocated to the segments, but
are listed in the ‘‘Other’’ row below. Corporate expenses include the executive department, accounting
36
department, information services department, general office management and building facilities management. Our
assets and liabilities are not allocated on a segment basis.
Information by industry segment for the years ended February 28, 2018 and 2017 is set forth below:
NET REVENUES
Publishing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UBAM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
8,267,500
103,698,600
$
9,007,500
97,620,600
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$111,966,100
$106,628,100
2018
2017
EARNINGS (LOSS) BEFORE INCOME TAXES
Publishing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UBAM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,763,200
19,428,600
(13,359,100)
$ 2,566,400
15,376,000
(13,330,300)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 7,832,700
$ 4,612,100
2018
2017
13. STOCK REPURCHASE PLAN
In April 2008, the Board of Directors authorized us to purchase up to an additional 500,000 shares of our
common stock under the plan initiated in 1998. This plan has no expiration date. During fiscal year 2018, we
purchased 6,525 shares of common stock at an average price of $9.73 per share totaling approximately $63,500.
The maximum number of shares that may be repurchased in the future is 296,604.
14. FAIR VALUE MEASUREMENTS
The valuation hierarchy included in U.S. GAAP considers the transparency of inputs used to value assets
and liabilities as of the measurement date. A financial instrument’s classification within the valuation hierarchy is
based on the lowest level of input that is significant to its fair value measurement. The three levels of the
valuation hierarchy and the classification of our financial assets and liabilities within the hierarchy are as
follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting
entity has the ability to access at the measurement date.
Level 2 - Observable inputs other than quoted prices included within Level 1 for the asset or liability, either
directly or indirectly. If an asset or liability has a specified term, a Level 2 input must be observable for
substantially the full term of the asset or liability.
Level 3 - Unobservable inputs for the asset or liability.
We do not report any assets or liabilities at fair value in the financial statements. However, the estimated
fair value of our line of credit is estimated by management to approximate the carrying value of $0 and
$4,882,900 at February 28, 2018 and 2017, respectively. The estimated fair value of our term notes payable is
estimated by management to approximate $19,454,500 and $20,130,100 at February 28, 2018 and 2017,
respectively. Management’s estimates are based on the obligations’ characteristics, including floating interest rate,
maturity, and collateral. Such valuation inputs are considered a Level 2 measurement in the fair value valuation
hierarchy.
15. SUBSEQUENT EVENTS
On May 25, 2018, the Board of Directors of EDC approved a $.10 dividend that will be paid to
shareholders of record on Monday, June 4, 2018.
37
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Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in Registration Statements (No. 33-60188 and 333-100659) on
Form S-8 of Educational Development Corporation of our report dated May 29, 2018, relating to the financial
statements, appearing in this Annual Report on Form 10-K of Educational Development Corporation for the year
ended February 28, 2018.
Exhibit 23.1
/s/ HOGANTAYLOR LLP
Tulsa, Oklahoma
May 29, 2018
Exhibit 31.1
I, Randall W. White, certify that:
CERTIFICATION
1.
I have reviewed this Annual Report on Form 10-K of Educational Development Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: May 29, 2018
/s/ Randall W. White
Chairman of the Board, President and Chief Executive Officer
Exhibit 31.2
I, Dan E. O’Keefe, certify that:
CERTIFICATION
1.
I have reviewed this Annual Report on Form 10-K of Educational Development Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: May 29, 2018
/s/ Dan E. O’Keefe
Chief Financial Officer and Corporate Secretary
(Principal Financial and Accounting Officer)
Exhibit 32.1
Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
In connection with the Annual Report of Educational Development Corporation (the ‘‘Company’’) on
Form 10-K for the period ending February 28, 2018, as filed with the Securities and Exchange Commission on
the date hereof (the ‘‘Report’’), the undersigned certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange
Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
Date:
May 29, 2018
By
/s/ Randall W. White
Randall W. White
President and Chief Executive Officer
(Principal Executive Officer)
Date:
May 29, 2018
By
/s/ Dan E. O’Keefe
Dan E. O’Keefe
Chief Financial Officer and Corporate Secretary
(Principal Financial and Accounting Officer)
A signed original of this written statement required by Section 906 has been provided to, and will be
retained by, the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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NET REVENUES
EARNINGS PER SHARE
Usborne Books &
More
EDC Publishing
Basic
Diluted
Common Stock
2018
2017
2016
2015
2014
Shares outstanding at year end
4,089,806
4,090,074
4,064,610
4,024,539
3,977,943
Book value at year end
$ 4.99
$ 3.72
$
3.25
$ 3.06
$ 3.16
Market price range:
High Close
Low Close
Market price at year end
$ 19.35
$ 9.55
$
11.34
$ 4.31
$ 3.75
$ 22.80
$ 14.60
$ 16.97
$ 5.80
$ 3.95
$ 6.75
$ 7.10
$
3.97
$ 3.57
$ 2.49
DIRECTORS
CORPORATE DATA
John A. Clerico
Co-founder and Chairman
ChartMark Investments, Inc.
Ronald T. McDaniel
Retired Vice President - Sales
Educational Development Corporation
Dr. Kara Gae Neal
Director, School of Urban Education
The University of Tulsa
Betsy Richert
Media Specialist
Tulsa Public Schools
Randall W. White
Chairman, President and
Chief Executive Officer
OFFICERS
Randall W. White
Chairman, President and
Chief Executive Officer
Dan O’Keefe
Chief Financial Officer
Heather Cobb
Vice President, UBAM
Craig M. White
Vice President - Information Systems
Notice of Annual Meeting
July 24, 2018, 10:00 a.m.
Educational Development Corporation
Executive Conference Room
5402 E.122nd East Avenue
Tulsa, Oklahoma 74146
Form 10-K
Educational Development Corporation’s
Form 10-K filed with the Securities and
Exchange Commission is available upon
request. Write to:
Randall W. White, President
Educational Development Corporation
5402 E.122nd East Avenue
Tulsa, Oklahoma, 74146
Transfer Agent
American Stock Transfer and Trust Company
New York, New York
Auditors
HoganTaylor LLP
Tulsa, Oklahoma
Corporate Offices
5402 E.122nd East Avenue
Tulsa, Oklahoma, 74146-2230
Phone (918) 622-4522
Fax (918) 665-7919
www.edcpub.com
Our
MISSION
5402 S. 122nd East Avenue • Tulsa, Oklahoma 74146-2230
Educational
Development
Corporation
20I8
A N N U A L R E P O R T